A SEP IRA, or Simplified Employee Pension Individual Retirement Account, is a type of retirement savings plan designed for self-employed individuals and small business owners. It allows employers to make tax-deductible contributions to their employees' retirement accounts, including their own. Contributions are flexible and can vary each year, making it easier for businesses with fluctuating income to save for retirement. One of the main advantages of a SEP IRA is its high contribution limits compared to traditional IRAs. For 2023, employers can contribute up to 25% of an employee's compensation or a maximum of $66,000, whichever is less. This makes it an attractive option for those looking to build substantial retirement savings.