Series 7 practice questioneasyRetirement Accounts — SEP IRA
A Simplified Employee Pension (SEP) IRA is most commonly used by:
- ALarge publicly traded corporations
- BNon-profit organizations exclusively
- CGovernment employees
- DSelf-employed individuals and small business owners✓ Correct answer
Explanation
Why D — Self-employed individuals and small business owners
SEP IRAs are designed primarily for self-employed individuals and small business owners because they are simple to set up and administer. The employer makes contributions directly to each eligible employee's SEP IRA. SEP IRAs allow higher contribution limits than Traditional IRAs, making them an attractive option for small business retirement planning.
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