No. of Recommendations: 0
R5473c writes:

<<I have an employer-funded SEP IRA (bank managed in mutual funds).

I am going to open my own account so that I can purchase stocks on line.

Can a tax deferred SEP account be a Roth type of IRA instead?>>


No, it cannot; however, after the employer's money reaches the SEP-IRA it may be converted to a Roth.

Given the following parameters, which would be better for me -- traditional tax deferred IRA or a Roth?

<<Current SEP account value: $10,000
Annual Contributions: $3,000
Duration: 15 years
Tax Bracket: 15% now, and probably the same at retirement. >>


Given those parameters and the same investment in each, neither would be better than the other from your income tax viewpoint; however, the proceeds of a Roth go to heirs tax-free while those in a SEP-IRA would be subject to income tax at the non-spousal heir's tax bracket.

Regards..Pixy
Print the post  

Announcements

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!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
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.
Advertisement