Business owners still have time to fund retirement for 2025

Small businesses and sole proprietors often struggle to offer retirement plans due to cost, complexity and uncertainty around year-end income, yet these same owners recognize how critical retirement benefits are for both themselves and their employees. A SEP IRA can help bridge that gap by allowing employers and self-employed individuals to set up and fund a plan after the close of the year, up to the tax-filing deadline plus extensions, with relatively simple administration. With high contribution limits of up to $70,000 for 2025 (and $72,000 for 2026), tax-deductible employer contributions and new Secure Act 2.0 flexibility to use Roth funding when appropriate, SEPs can support meaningful long-term savings while offering planning options around current versus future taxation.

For advisors working with business owners who have variable income or part-time staff, the discretionary nature of SEP contributions and eligibility rules can provide valuable control over annual costs. At the same time, offering a SEP IRA may enhance employee retention by delivering an immediately vested benefit that many workers value as highly as direct pay.