SEP RMD and same year contributions
HI, my client is self employed and contributes to his SEP each year, he is 72 and takes RMD from his SEP as well.
I’m confused by this, and wondering if i am missing something in that he 1) can’t contribute 2) doesn’t have to take RMD and or 3) he can contribute and has to take RMD.
Any help, and guidance on this is greatly appreciated.
Permalink Submitted by Alan Spross on Tue, 2008-07-08 22:00
It’s “3”, so client is correct with the status quo.
All IRA types are subject to RMD at 70.5, unlike qualified employer plans which generally offer the “still working” exception to RMD requirements.
However, the contribution rules for a SEP IRA follow many of the employer plan rules, including the ability to contribute without regard to age as long as owner is still working.
Therefore, funds can still be going into the account at the same time they must come out under IRA RMD rules.