SEP Gold IRA for Self-Employed Investors: Higher Limits, Same Benefits

For self-employed individuals and small business owners, the standard IRA contribution limit of $7,000 per year can feel constraining—especially when the goal is to build a meaningful retirement account while also adding exposure to hard assets like gold and silver. The SEP IRA solves the contribution problem by allowing contributions up to 10 times higher than a traditional IRA, and it can be structured as a self-directed account that holds physical precious metals.

A SEP gold IRA combines the high contribution limits of a Simplified Employee Pension plan with the physical metals holdings of a self-directed IRA. For the right investor, it is one of the most powerful retirement savings vehicles available.

What Is a SEP IRA?

A Simplified Employee Pension IRA (SEP IRA) is a tax-deferred retirement account designed for self-employed individuals and small business owners. Contributions are made by the employer (which, for the self-employed, means you), are generally tax-deductible, and grow tax-deferred until withdrawal. Like a traditional IRA, distributions in retirement are taxed as ordinary income, and early withdrawals before age 59½ are subject to a 10% penalty.

The defining advantage of the SEP IRA over a traditional or Roth IRA is its dramatically higher contribution ceiling. For 2024, the SEP IRA contribution limit is the lesser of 25% of net self-employment income or $69,000—compared to $7,000 for a standard IRA. For high-earning self-employed individuals, this difference is substantial.

How a SEP Gold IRA Works

A SEP gold IRA is simply a self-directed SEP IRA where the permitted investments include IRS-approved physical precious metals rather than (or in addition to) conventional securities. The account must be held by an IRS-approved custodian who handles self-directed accounts with non-standard assets, and any metals purchased must be stored at an IRS-approved depository.

In all other respects—tax treatment, contribution rules, distribution rules, prohibited transaction restrictions—a SEP gold IRA follows the same regulations as any other SEP IRA. The "gold" part describes what the account holds, not a different type of account with different tax rules.

Who Qualifies for a SEP IRA?

SEP IRAs are available to a broad range of self-employed individuals and small businesses:

• Sole proprietors (including freelancers, consultants, and gig workers)
• Partners in a partnership
• S-corporation shareholders who receive W-2 wages from their own business
• LLC members (depending on tax classification)
• Small business owners with employees

If you have employees, there are additional rules: you must contribute to SEP IRAs for all eligible employees at the same percentage of compensation that you contribute for yourself. An "eligible employee" is generally anyone who is at least 21 years old, has worked for you in at least 3 of the last 5 years, and earned at least $750 in compensation from you during 2024. This requirement can make SEP IRAs less attractive for businesses with multiple employees compared to other plan types like a SIMPLE IRA or a solo 401(k).

For true one-person businesses (no employees other than yourself and possibly a spouse), the SEP IRA is often the simplest and most generous retirement savings option available.

Contribution Limits and Calculations

The SEP IRA contribution limit for 2024 is the lesser of:

• 25% of net self-employment income (after the self-employment tax deduction), or
• $69,000

For a self-employed individual, the calculation is slightly different from a straight 25% of gross income. You must first subtract the self-employment tax deduction (half of your self-employment tax), then apply the 25% rate to the remaining net self-employment earnings. The effective maximum contribution rate works out to approximately 20% of net self-employment income before the SE deduction.

Example: If your net self-employment income after the SE tax deduction is $138,000, your maximum SEP IRA contribution is $34,500 (25% of $138,000)—nearly five times the standard IRA limit.

Contributions to a SEP IRA for a given tax year can be made up to the tax-filing deadline plus extensions. For sole proprietors filing Schedule C, that typically means until October 15 of the following year if an extension is filed. This flexibility allows you to calculate your final income for the year, determine the optimal contribution amount, and fund the account before the extended deadline.

Tax Treatment

SEP IRA contributions are generally fully tax-deductible as a business expense (for self-employed individuals, as an adjustment to income on Schedule 1 of Form 1040). This means contributions reduce your adjusted gross income dollar-for-dollar in the contribution year, providing an immediate tax benefit. Inside the account, metals grow tax-deferred. Distributions in retirement are taxed as ordinary income.

Unlike Roth IRAs, there is no Roth version of a SEP IRA. All SEP IRA contributions are pre-tax, and all distributions are taxable. If you want tax-free growth in retirement, you would need to pair a SEP IRA with a separate Roth IRA (if you are income-eligible).

SEP vs. Traditional Gold IRA: Key Differences

Setting Up a SEP Gold IRA

The process is similar to opening a traditional gold IRA, with one additional step: establishing the SEP plan agreement. Here is the typical sequence:

1. Choose a self-directed IRA custodian that supports SEP IRA accounts with precious metals holdings—not all custodians offer this combination.
2. Execute a SEP plan agreement. The IRS provides a model agreement (Form 5305-SEP) that most custodians will have you complete. This formally establishes the SEP plan for your business.
3. Fund the account by making contributions from your business bank account up to the calculated limit for the tax year.
4. Direct metals purchases through IRS-approved bullion meeting the applicable purity standards.
5. Coordinate storage at an IRS-approved depository through your custodian.

If you have eligible employees, you must open a separate SEP IRA for each one and make proportional contributions at the same percentage of compensation used for your own account. Failure to do so violates the plan's qualification requirements.

RMDs and Withdrawal Rules

SEP gold IRAs are subject to Required Minimum Distributions beginning at age 73. The mechanics are the same as a traditional gold IRA: you can either sell enough metal to satisfy the RMD in cash, or take an in-kind distribution of physical metal equal in value to the required amount. Both approaches result in ordinary income taxes on the distributed amount.

Early withdrawals before age 59½ are subject to income taxes plus the 10% early withdrawal penalty, with the same exceptions that apply to traditional IRAs (disability, certain medical expenses, etc.).

Is a SEP Gold IRA Right for You?

A SEP gold IRA is most compelling for self-employed individuals with high net income who want to maximize tax-deferred savings while incorporating physical precious metals into their retirement allocation. The high contribution ceiling is the headline benefit—but it only delivers full value if you have the income to support large contributions and can absorb the fees of a self-directed account on a proportionally larger balance.

For lower-income self-employed individuals or those with significant employee headcount, other structures like a solo 401(k) or SIMPLE IRA may offer better outcomes. This is a decision well worth discussing with a CPA who understands self-employed retirement planning.