sep-ira
my wife just received money from her bosses’ sep-ira. she works part time for him. how does she handle this money. does she put it into a ira or can she put it in a sep and open a roth ira.
my wife just received money from her bosses’ sep-ira. she works part time for him. how does she handle this money. does she put it into a ira or can she put it in a sep and open a roth ira.
Permalink Submitted by Denise Appleby on Sun, 2008-01-20 16:57
Scooper,
Are you saying that your wife’s employer gave her a check that represents her share of the [url=http://www.retirementdictionary.com/sep.htm%5DSEP%5B/url%5Dcontribution? Is the check made payable to her?
If so, then it does not appear the employer did the right thing. If she is eligible to receive a SEP [url=http://www.retirementdictionary.com/conrtibution.htm%5Dcontribution%5B/url%5D, her employer is required to send that amount to her IRA. The IRA must be a traditional IRA. Some financial institutions require that the traditional IRA is labeled as a SEP IRA.
The check must be made payable to her IRA. For instance “ ABC Custodian FBO Jane Brown SEP IRA”
The establishing of a [url=http://www.retirementdictionary.com/Roth-IRA.htm%5DRoth IRA[/url] is independent of the SEP. However, the SEP IRA balance can be [url=http://www.retirementdictionary.com/Roth-IRA-Conversion.htm%5Dconverted%5B/u… a Roth IRA, if she meets the conversion eligibility requirements