Sep IRA while employed at age 70-1/2
If someone has a Sep IRA and is still employed at age 70-1/2, does the Sep owner need to begin RMD’s, or can RMD’s be deferred until the owner is no longer employed?
If someone has a Sep IRA and is still employed at age 70-1/2, does the Sep owner need to begin RMD’s, or can RMD’s be deferred until the owner is no longer employed?
Permalink Submitted by Anonymous (not verified) on Tue, 2010-02-09 17:22
A SEP IRA is like a regular IRA. YES, RMD rules are required in the year owner turns age 70 1/2.
pko
Permalink Submitted by Dennis Prout on Wed, 2010-02-10 14:22
If Traditional IRA rules apply to a Sep, does that also mean that a Sep owner can no longer contribute to the Sep beginning with the year the Sep owner reaches age 70-1/2, even if the Sep owner is still working?
Permalink Submitted by Anonymous (not verified) on Wed, 2010-02-10 17:35
Only the so called “employer” contributions (the ones made as part of the business) can still be made after 70 1/2. They are even segregated on the 5498 to show the different type of contribution.
pko
Permalink Submitted by mk foss on Wed, 2010-02-10 18:36
Fortunately for people still working after age 70-1/2 an age discrimination law allows contributions to a retirement plan. As more and more people are planning to work past the traditional retirement ages – this will help.
The good thing is that you can put away 20-25% (depending on whether you’re incorporated) of earnings while taking out only 4-5% from the SEP.