SEP-IRA Conversion to Roth IRA
My wife has worked for a doctor’s office for five years in which they opened a SEP-IRA in her name and contributed to it for three years but did not contribute to it last year. The practice is changing hands (the doctor is going to work for a hospital). What can my wife do with this SEP-IRA? She is 57 years old and doesn”t need the money now. Can she convert it to a ROTH IRA. She has already contributed the max amount to her 2011 RIRA.
Permalink Submitted by Alan Spross on Wed, 2011-11-16 21:24
She can roll it over to her TIRA, she can convert it to a Roth IRA, or some combination of both.
If she does not want to do either, she can make a traditional IRA contribution to the SEP IRA, if she is eligible to contribute under TIRA rules. A SEP IRA can receive both SEP contributions and regular TIRA contributions, but she must tell the custodian which type of contribution is being made.
Permalink Submitted by Richard Partin on Thu, 2011-11-17 01:08
Thanks Alan for your quick response
Permalink Submitted by Martin Helmer on Thu, 2011-11-17 02:25
In the event the employer makes a contribution for 2011, it could be deep into 2012 before that’s done or even decided. Keeping the SEP Ira open another year would facilitate obtaining such a contribution.
As it stands, Roth contributions have been maxed out for 2011, so no TIRA contributions can be made without undoing some or all of the Roth amount.
Permalink Submitted by Alan Spross on Thu, 2011-11-17 03:21
Thank you Martin. I missed that Roth contribution.