What is a key feature of a SEP-IRA?

A key feature of a SEP-IRA (Simplified Employee Pension Individual Retirement Account) is that it allows employers to make contributions to their employees' retirement plans. This type of retirement account is specifically designed for small businesses and self-employed individuals, providing them with a way to contribute to their own and their employees' retirement savings in a simplified manner.

Employers can contribute a percentage of their income to each eligible employee's SEP-IRA account, and this contribution can vary from year to year based on the business's profit. Contributions made by employers are tax-deductible, which benefits both the employer and the employees as it reduces the taxable income for the business.

The other options do not accurately capture the primary function of a SEP-IRA. For instance, it does not limit contributions to employees only, as employers make contributions on behalf of eligible employees. Besides, while SEP-IRAs do require less administrative burden than many other retirement plans, they still involve some administration, particularly regarding contribution limits and eligibility requirements. Lastly, compared to traditional IRAs, SEP-IRAs can be less costly to set up because they do not involve the same level of ongoing administrative complexity as other retirement plans, which often have higher setup or maintenance costs. Thus,