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Author: BoomerJ Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75626  
Subject: SEP catch-up? Date: 4/12/2011 12:51 PM
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This article just posted today (4-12-11) on Yahoo Finance, talking about catch-up contributions of $5500 in a SEP for the years 2010 & 2011. Hope this link works (if not, it's reachable from their home page today)

http://finance.yahoo.com/focus-retirement/article/112522/bes...

In Pub 560, page 4, far left column, it does talk a bit about this catch-up, saying the $5500 applies to accounts other than Simple. It doesn't specifically say it's valid in a SEP, but also doesn't say it's NOT valid either. Very confusing.

I figured someone on here would have a reliable answer. You guys are da bomb, LOL.
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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68896 of 75626
Subject: Re: SEP catch-up? Date: 4/13/2011 5:31 PM
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This article is in error. A SEP contribution made by a self employed individual is considered to come from the 'employer' side of the contribution. Catch-up contributions may only be made by employee salary deferrals, as would be the case in employee contributions to a 401(k), 403(b), 457(b) or SIMPLE IRA.

What this article may be thinking of are either:

1. catchup contributions to a SARSEP, which are allowable (under certain circumstances)....but no new SARSEPs have been created since 1997, with the few remaining today a result of being grandfathered, or

2. IRA contributions may be made to one's SEP IRA account, but these are limited to a maximum contribution of $5,000 plus a $1,000 catchup contribution if age 50 or older.

BruceM

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