A Simplified Employee Pension (SEP) IRA is a type of retirement savings plan mainly used by self-employed individuals and small business owners. It’s easy to set up and manage, and it allows the employer to make contributions to employees’ retirement savings—including their own if they’re self-employed. Unlike a traditional 401k, only the employer contributes to a SEP IRA—employees do not make their own contributions. It’s a popular choice for those who want a flexible and low-maintenance way to save for retirement, especially when business income may vary from year to year. Contributions are tax-deductible for the business, and the money grows tax-deferred until it’s withdrawn in retirement.