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Simplified Employee Pensions (SEPs) and SIMPLE Plans

SEP vs. Keogh

How do you decide if you should establish a SEP or a Keogh? You must compare both types of plans and determine which retirement plan best fits your needs. Here is a chart summarizing the key features of SEPs and Keoghs:

Key Features of SEPs and Keoghs

Features / Provisions

SEP

Keogh

Plan document

One-page form can be used: IRS Form 5305-SEP

Full plan document

Maximum contribution

Maximum employer deduction

Lesser of $57,000 in 2020 ($56,000in 2019) or 100% of compensation per employee.

25% of total eligible compensation of employees covered by the plan.

Loan provisions

Cannot borrow against SEP account

Able to borrow against Keogh account

Eligibility

Less restrictive rules for employee eligibility

More restrictive rules for employee eligibility

When to establish

Have until due date of tax return to establish

Must be established by December 31

Annual reporting requirements

None

Annual reporting requirement on Form 5500



Disclaimers:

Not a Deposit.
Not FDIC-Insured.
Not Insured by any Government Agency.
Not Guaranteed by the Bank.
May go Down in Value.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA and SIPC. Infinex and BancorpSouth Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

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