SEP Gold IRA Account Guide

A retirement free of financial worry requires careful planning—and it’s never too early to start, especially if you’re self-employed. A SEP gold IRA can help. This unique type of retirement account is primarily used by freelancers, contractors, and small business owners (and those who work for them). You can use the account to invest in gold, silver, and other precious metals.

If you want to add gold and silver to your retirement plan, this guide can help. Read on to learn more about a SEP gold IRA and how to start your own.

How does a SEP gold IRA account work?

A SEP gold IRA (Simplified Employee Pension) is a self-directed Individual Retirement Account designed for small business owners, self-employed professionals, and those who work for them. Sometimes, you can use a SEP gold IRA to invest in gold, silver (and other precious metals), and other tangible assets, such as collectibles, artwork, and real estate.  

You’ll need a custodian to set up and manage a SEP gold IRA. A custodian is a financial institution that safeguards your account’s investment according to IRS regulations. Benefits of a custodian include IRS compliance, security, and administrative support. 

Your contributions to a SEP gold IRA are pre-tax, meaning you pay taxes upon withdrawal. SEP gold IRAs offer higher contribution limits than other retirement accounts. This type of IRA is best for self-employed or business owners with higher income expectations in retirement. 

SEP gold IRA guidelines

To operate a SEP gold IRA, you must adhere to a few IRS guidelines regarding these accounts. These guidelines include contribution limits, eligibility requirements, and rules for withdrawals. Here’s an in-depth look at these guidelines: 

Contribution limits

SEP IRAs have higher limits than traditional and Roth IRAs, but they’re not unlimited. An employer can contribute 25% of your total annual compensation or $69,000 for 2024. If you’re self-employed, “compensation” refers to your net yearly earnings minus half your self-employment tax and your contributions to your personal IRA (if any).

Year	Contribution limit	Percentage of compensation
2024	$69,000	25%
2023	$66,000	25%
2022	$61,000	25%
2021	$58,000	25%

Eligibility requirements 

Employers should complete IRS form 5305-SEP to establish a plan. Employees must be 21 years old, have worked with the employer for at least three of the last five years, and have earned at least $750 in compensation in the last year. 

The employer can choose to have less stringent rules. For example, employees can be age 18 and have three months of service. 

Erin Kinkade

CFP®

Only employers can contribute to the plan; certain investments, such as insurance and securities, are prohibited. 

Withdrawals and investing

Withdrawals made before 59½ are subject to a 10% early withdrawal penalty plus regular income tax. At age 72, 73, or 75, account holders must take required minimum distributions (RMDs). If you don’t take distributions, you owe a 25% excise tax on the undistributed amount or a lower percentage, such as 10%, if corrected within what the IRS determines is reasonable. 

Pros and cons of a SEP gold IRA

Let’s examine an example and the pros and cons of a SEP gold IRA.

Jed works for Rambling RV, a company that decided to establish a SEP for its employees. The financial institution Rambling RV has chosen for its SEP offers many investment funds. 

Here are the benefits and drawbacks of Jed and Rambling RV.

Pros

• Easy to set up and low administrative cost for the employer

• Flexible annual contributions mean Rambling RV can contribute more in good years and less during a downturn

• Jed can diversify and split his contribution among the multiple funds

Cons

• Jed can’t make contributions himself; only the employer, Rambling RV, can contribute to the SEP

• Rambling RV must apply the same contribution rate to all employees

• Jed must start taking distributions at his beginning RMD age, which may be 72, 73, or 75, depending on the year he was born.

How do you start a SEP gold IRA account?

Your first step to starting a SEP gold IRA is to find a gold IRA custodian to assist you with setup, purchasing your metals, shipping them to a depository, handling IRS paperwork, and funding your account. Here is an easy three-step process you can follow to get started:

1. Sign a written agreement and formalize the SEP to provide benefits to all eligible employees.
2. Inform your employees, and share the details of the SEP agreement.
3. Set up an IRA for each eligible employee.
   

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How does a gold IRA work?

What are the top companies for a SEP gold IRA? 

Many companies offer SEP gold IRA services, each with its own offerings and fee structure. If you want to be sure you’re getting the best account (and pricing) for your needs, shopping around and comparing at least a few options is essential. Here are characteristics that help us define the top companies for a SEP gold IRA:

• Reputation
• Customer service
• Investment options
• Resources
• Security
• Competitive pricing

Among the many companies we’ve reviewed, the top companies that excel in these areas are in the table below.

Not sure where to start? Check out our best gold IRA companies guide.

Our expert’s advice

Erin Kinkade

CFP®

How can investors balance the risks and rewards of holding gold in a SEP IRA, and what percentage of their retirement portfolio should they consider allocating to precious metals? I suggest consulting with a financial professional to help analyze your risk tolerance and capacity and how incorporating gold into your portfolio affects your overall financial plan. I typically recommend holding 5% to 10% of one asset in a portfolio— definitely no more than 10%.

Is a SEP gold IRA right for you?

A SEP gold IRA can be an excellent addition to your retirement plan. But what scenario makes it a perfect fit? SEP gold IRAs are ideal for self-employed individuals and small business owners who want to maximize their retirement contributions. 

SEP gold IRAs are beneficial if you expect your tax bracket to be lower in retirement. Investing in a SEP gold IRA is also a smart hedge against inflation because gold tends to hold its value and increase over time. It’s a terrific way to diversify your portfolio too. 

Here are questions to ask yourself if you’re considering whether a SEP gold IRA is the right choice for you:

Consideration	Yes	No
Are you self-employed or a small business owner?	✅ Ideal for a SEP gold IRA	❌ Consider other IRA options
Do you want to maximize your retirement contributions?	✅ SEP gold IRAs offer higher limits	❌ Consider other IRA options
Are you looking for tax advantages?	✅ Contributions are tax-deductible for the employer and employee	❌ Explore other retirement accounts
Do you want to protect your wealth from inflation?	✅ Gold can act as a hedge	❌ Consider traditional retirement accounts
Do you need to diversify your retirement portfolio?	✅ SEP gold IRAs provide diversification	❌ Consider traditional IRAs

How do SEP IRAs compare to other IRAs?

Choosing the right IRA is an important step toward your retirement goals. Understanding the differences between IRAs will help you make informed decisions about your retirement plans. Below are breakdowns of the three types of IRA accounts.

	SEP IRA
Best for	Self-employed, small business owners; your tax bracket will be lower in retirement
Contributions	Pre-tax
Contribution limits	Less of $69,000 or 25% of your annual compensation
Tax-deductible?	Yes
Benefits	High contribution limits and tax-deductible
Requirements	Must be self-employed or work for a self-employed person and work for the business at least 3 of the last 5 years

	Traditional IRA
Best for	Your tax bracket will be lower in retirement
Contributions	Pre-tax
Contribution limits	$7,000 for age 49 and under, $8,000 for 50+
Tax-deductible?	Yes
Benefits	Tax-deductible
Requirements	Income <$77,000 if single and <$123,000 if married and filing jointly

	Roth IRA
Best for	Your tax bracket will be higher in retirement
Contributions	Post-tax
Contribution limits	$7,000 for age 49 and under, $8,000 for 50+
Tax-deductible?	No
Benefits	Not taxed in retirement, when earnings are lower
Requirements	Income <$146,000 if single and <$230,000 if married and filing jointly

While your personal circumstances will affect your pick, a good rule of thumb would be to consider a SEP or Roth IRA if you expect to make less money in retirement than employment and a SEP if you expect to make high contributions during your working years.

FAQ 

What is the best SEP gold IRA custodian?

The best SEP gold IRA custodian will vary based on individual needs. The companies listed above partner with custodians to offer a complete service to their clients. For example, these companies may manage the accounts with custodians such as Equity Trust, STRATA Trust Company, or Kingdom Trust.

Discuss custodians with your selected gold IRA company to choose the best one for your needs.

Can you do a SEP gold IRA rollover from another retirement account?

You can perform a SEP gold IRA rollover from another retirement account, such as a traditional IRA, Roth IRA, or 401(k). The process involves transferring funds from your retirement account to your SEP gold IRA, often through a direct transfer or a rollover within 60 days. Following IRS rules is important to avoid penalties and taxes during the rollover process.

What should I look for in SEP gold IRA custodian reviews?

When reviewing SEP gold IRA custodians, look for the custodian’s reputation, expertise in managing SEP IRAs, and security measures for storing precious metals. Customer reviews and ratings on platforms such as the Better Business Bureau and Trustpilot can provide valuable insights into other investors’ experiences.