No. of Recommendations: 0
<< Actually, SEPP can apply to a Roth as well as a tradtional IRA. The only difference is in a Roth SEPPs don't come into play until all the contributions have been used and all that's left is earnings. To take earnings when under age 59 1/2, the only way to avoid the penalty is by using SEPP. And you will pay taxes on that withdrawal. If you can avoid touching those earnings until age 59 1/2, they come out tax-free (assuming the account has been open for five tax-years). Thus, I would use any traditional IRA first because those will be taxed anyway. >>

Thanks for the clarification, Pixy. You answered a diffferent question than what I read, so I want to make sure that I'm right with what I think.

Let's say the original poster wants to begin SEPPing his traditional IRA. Does he include the value of his Roth IRA when calculating the SEPPs from the traditional IRA?

The point I was trying to make was that you only consider traditional IRA money when doing a traditional IRA SEPP. I didn't add that you would also consider only Roth money when calculating a Roth SEPP. The big question: am I right?

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.