Whether you're a consultant, freelancer, hairdresser, or dog walker, a simplified employee pension plan IRA (known as a SEP IRA) offers an attractive option for entrepreneurs and small business owners. What is a SEP IRA? It's just like an IRA for the self-employed, but in this case the account is opened by the employer, rather than the individual. Once you find out how to open a SEP IRA, you can enjoy all the tax benefits of an IRA account, but you're able to contribute much more (up to $45,000 in 2007). This makes SEP plans ideal for those who need to catch up on retirement savings. Best of all, there's very little paperwork involved to open a SEP IRA-so you can focus your energies on your 'real' business.

• Are you eligible to open a SEP IRA? If you're self-employed, a sole proprietor or a partnership, then you certainly are. Find a reputable firm with the right mix of investments to help you achieve your goals. You can open a SEP IRA in just minutes - usually with no charge - through a bank, mutual fund, brokerage firm or insurance company. Keep in mind that any rules you establish - age or eligibility requirements, percentage contributions - will apply to all employees, including yourself.

• Once you learn how to open your SEP IRA, choose where you'd like to invest your money, bearing in mind that the goal with SEP plans is to be safely diversified between stocks, bonds, cash, real estate and other assets. When opening a SEP IRA, workers typically have the help of an accountant or financial adviser who guides the investment strategy. Each employee has a separate account and designs his own plan.

• Determine how much you will contribute to your SEP plan - and try to make that as much as possible. For 2007, the limits were 25% of compensation (and no more than $45,000). If you have a separate 401(k) plan, contributions made to that account won't affect your SEP limits. You'll enjoy compound, tax-deferred growth on all the money you invest here, and will only pay taxes once you start drawing on the account. As with traditional 401k plans, penalties will apply for withdrawals from SEP plans made before the age of 59 1/2; and minimum required distributions must be made by the age of 70½.

• With an SEP IRA you're not locked into making the same contributions every year. In fact, you decide each year whether, and how much, to contribute to your (and your employees') SEP-IRA accounts.