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Retirement Planning
SARSEP-IRA

A SARSEP-IRA, or a Salary Reduction SEP-IRA, is a tax-deferred retirement plan provided by sole proprietors or small businesses with fewer than 25 employees. Contributions are made by both the employee and the employer. Contributions and the investment earnings grow tax-deferred until withdrawal (assumed to be retirement), at which time they are taxed as ordinary income. New SARSEP- IRAs couldn't be opened after December 31, 1996. They were replaced by the Savings Incentive Match Plan for Employees IRA, or SIMPLE-IRA
 
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