Combining IRA’s
My wife, age 71 & still employed, has begun taking RMD’s from her traditional IRA & her SEP-IRA. I understand that she can no longer make additional contributions to the traditional IRA, but if she occasionally has self-employment income, can she contribute to the SEP? Also, can the two IRAs now be combined to save yearly fees and paperwork? If the accounts can be combined, would it make more sense to move the traditional IRA funds into the SEP if additional SEP contributions are possible?
Permalink Submitted by Jose Morales on Mon, 2016-09-12 16:29
Yes, SEP contributions can continue to be made as long as she has self-employment income. From the perspective of the IRS, the account receiving SEP contributions is a Traditional IRA. They certainly do not care whether you keep all of your Traditional IRAs separated or combined. You may have trouble with your IRA Custodian though, as they may want to keep them separated so as not to make a mistake with coding the contribution, or they may just not understand what I explained above.