\u201cIn a few years I will have to take required minimum distributions (RMDs) from my traditional IRA (currently my only retirement account).\u201d – MarketWatch photo illustration\/iStockphoto <\/p>\n
I have a few questions about retirement accounts. Thanks in advance.<\/p>\n
1) In a few years I will have to take required minimum distributions (RMDs) from my traditional IRA (currently my only retirement account). I plan to work until age 80 or so. Will I be able to continue contributing to the IRA even after beginning RMDs?<\/p>\n
2) I\u2019m self-employed. No employees and not incorporated. My income is reported on a 1099-K (basically a pass-through from the company that processes my clients\u2019 credit-card payments). I contribute the max to my IRA every year. I will soon, in addition, derive income as an independent contractor and that income will report on a standard 1099. So I\u2019ll have both. My key question: Can I open a SEP-IRA for the 1099 income (and possibly even the 1099-K income)? If so, can I contribute to both?<\/p>\n
Sincerely,<\/p>\n
Self-Employed Saver<\/p>\n
See:<\/b> I\u2019ve been getting the wrong Social Security Disability benefit for years. How do I fix it?<\/a><\/p>\n To answer your first question simply \u2014 yes. Because it is an IRA, you will have to take RMD \u2014 but thanks to the Secure Act<\/a>, you can continue to contribute to the account so long as you receive earned income.<\/p>\n To answer your second question simply \u2014 also yes. You can use 1099 income to fund a SEP-IRA since it is self-employment income. The same goes for your 1099-K income if it\u2019s self-employment income, too. With this question, there\u2019s a bit more to know, though.<\/p>\n<\/p>\n A SEP-IRA is basically just a traditional IRA for business owners, so it follows many of the same rules as the account you\u2019ve already come to know. There are, however, a few differences. For example, the maximum you can contribute to a SEP in 2025 is the lesser of up to 25% of your total compensation, which is determined by your net earnings, or up to $70,000.<\/p>\n \u201cThere is no limitation when coordinating a SEP-IRA and a traditional IRA,\u201d said Byrke Sestok, a partner at Moneco Advisors. You can contribute to a SEP as well as to your traditional IRA, since the SEP is funded with employer contributions and the traditional IRA is made with personal contributions.<\/p>\n \u201cYou can both receive employer contributions to a SEP-IRA and make regular, annual contributions to a traditional or Roth IRA. Employer contributions made under a SEP plan do not affect the amount you can contribute to an IRA on your own behalf,\u201d according to the Internal Revenue Service<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cIn a few years I will have to take required minimum distributions (RMDs) from my traditional IRA (currently…\n","protected":false},"author":3,"featured_media":131453,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,65780,79869,255,79868,10975,33550,79871,79870,79867,67,132,68],"class_list":{"0":"post-131452","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ira","10":"tag-marketwatch","11":"tag-personal-finance","12":"tag-required-minimum-distributions","13":"tag-retirement-account","14":"tag-retirement-accounts","15":"tag-self-employment-income","16":"tag-sep-ira","17":"tag-traditional-ira","18":"tag-united-states","19":"tag-unitedstates","20":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114998280879090198","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/131452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=131452"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/131452\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/131453"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=131452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=131452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=131452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}