Online retirement provider PensionBee is now offering a Simplified Employee Pension (SEP) IRA designed for self-employed professionals through its digital platform.
The PensionBee SEP IRA is available to self-employed individuals and single business owners and offers:
• Higher contribution limits: SEP IRAs allow account owners to contribute up to 25% or $70,000 of income, higher than Traditional IRA limits, which are $7,000 for people under 50 and $8,000 for those over 50. The higher limits can help entrepreneurs boost their savings during profitable years, making up for years when income was less predictable.
• Retirement planning tools: the in-app retirement calculator helps users model different scenarios to find various ways to reach their savings goals.
• Consolidation of existing accounts: Account owners can transfer their old IRAs and 401(k) accounts into the SEP IRA, so they have just one retirement account to manage.
PensionBee offers human support to its users through a staff of “BeeKeepers,” who can help with the account setup process.
Self-employment has become increasingly common in recent years, especially as the gig economy has grown. Projections estimate that, by 2027, 86.5 million people will be freelancing in the United States, making up 50.9% of the U.S. workforce.
Self-employed professionals lack access to employer-sponsored retirement benefits, including automatic enrollment and employer matching, and they often report lower levels of retirement preparedness.
While nearly 72% of traditional employees participate in a retirement plan, just 13% of self-employed individuals in single-person businesses say the same. A survey by SCORE found 34% of small business owners have no retirement savings plan outside their company. Additionally, 40% are relying on selling their business to fund retirement, which assumes they’ll be able to find the right buyer offering the right price at the right time.
Gig workers are in the same boat. According to a MacroMonitor survey, gig workers expect to retire three years later than full-time employees (67 years old instead of 64 years old), and 51% expect to rely on Social Security for their income.
“Pursuing your passions should not come at the expense of future retirement security,” said Romi Savova, CEO of PensionBee, in a statement. “The addition of SEP IRAs to our platform allows us to empower self-employed Americans who may not have access to traditional retirement plans. Everyone deserves to plan for and enjoy a happy retirement.”
PensionBee’s SEP IRA is the latest addition to its retirement account offerings, which include Traditional, Roth and Safe Harbor IRAs.
SEE ALSO:
• 401(k) Rollover Delays Could Cost Nearly $76k in Lost Savings
• New Study Highlights Key Role IRAs Play in Retirement Planning
• 4 Retirement Planning Tips for the Self-Employed
Corey Dahl is assistant editor with PropertyCasualty360.com. Previously, Corey was the editor of Colorado Builder magazine andS enior Manager of Content Strategy & Development at Charles Schwab.