As a creative entrepreneur, your focus is often on driving your business forward—whether that’s crafting your vision, managing clients, or building your brand. But amidst the hustle, it’s crucial to build a solid financial foundation. Enter the Simplified Employee Pension (SEP) IRA, a retirement plan designed for self-employed individuals and small business owners.
In 2025, setting up a SEP IRA could be one of the smartest financial moves you make. Here’s what you need to know and why we choose The Sabel/Wyatt Group at Bank of America Merrill Lynch to help us navigate the process (though many banks and financial institutions offer similar options).
What Is a SEP IRA?
A SEP IRA is a retirement savings plan that allows you to contribute significantly more than traditional IRAs. The current contribution limit for a SEP is the lesser of 25% of eligible comp or $70k/year & a $350k cap per employee. Its flexibility and high contribution limits make it ideal for entrepreneurs who experience variable income.
Why Creative Entrepreneurs Should Consider a SEP IRA
Tax Advantages
Contributions to a SEP IRA are tax-deductible, lowering your taxable income. For entrepreneurs balancing unpredictable incomes, this means more money to reinvest in your business or future.Flexibility
Unlike some retirement plans, SEPs don’t require mandatory annual contributions. If you have a lean year, you can skip contributions, while in a lucrative year, you can save more.Ease of Setup
SEPs are simple to establish and maintain, with minimal administrative costs and no annual IRS reporting requirements.Long-Term Security
The creative industry can be unpredictable. A SEP IRA ensures you’re prioritizing long-term financial stability, even when income ebbs and flows.
Why We Chose Bank of America Merrill Lynch
For us, partnering with Bank of America Merrill Lynch made sense because they offer:
- Expert Financial Guidance: Their advisors understand the needs of creative entrepreneurs and can help tailor a SEP IRA strategy to match our goals.
- Comprehensive Investment Options: Merrill Lynch’s platform provides diverse investment choices, making it easy to create a balanced portfolio.
- Seamless Integration: We also love how their business banking services integrate with retirement planning, simplifying our financial management.
That said, many banks and financial institutions offer SEP IRA options. If you already have a trusted bank or investment advisor, reach out to see if they offer SEPs and compare their services.
How to Set Up a SEP IRA in 2025
Consult with Your Bank or Financial Institution
Whether you choose Bank of America Merrill Lynch or your current bank, schedule a consultation to discuss your retirement goals and determine your eligibility.Complete the Required Paperwork
Most banks will guide you through IRS Form 5305-SEP or their own equivalent documentation.Fund Your SEP
You can make contributions for the 2025 tax year until April 15, 2026.Choose Your Investments
Work with your advisor to select investments that align with your goals, whether growth-focused or conservative strategies.
Tips for Getting Started
- Shop Around: If your current bank doesn’t offer SEP IRAs or you want to explore options, check out other reputable financial institutions.
- Automate Contributions: Set up recurring transfers during high-earning months to stay consistent.
- Ask Questions: Retirement planning can feel overwhelming, so don’t hesitate to seek guidance from professionals.
Whether you’re just starting your creative business or already thriving, setting up a SEP IRA is a proactive step toward securing your financial future. By taking the time to plan now, you’re ensuring that your hard work pays off for years to come.
At The Sabel/Wyatt Group/Bank of America Merrill Lynch, we’ve found the guidance and tools we need to confidently plan for retirement. But the most important step is simply getting started—whether with your current bank or another trusted provider.
Are you ready to elevate your financial strategy? Let us know your thoughts in the comments or share this article with a fellow creative entrepreneur.
