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Subject:  Re: Roth SEP? Date:  9/26/1998  11:09 AM
Author:  TMFPixy Number:  5662 of 101521

KcofMaine wrote:

I have been trying to figure out how to get more into my Roth IRA. My wife and I are fully funding our own Roth IRAs.

I am self employed. I can do a SEP (Simplified Employee Pension Plan). I have no employees, therefore, don't need to also contribute equal amounts for others. I can give up to just a little less than 15% of my Schedule C income into such a vehicle. This vehicle seems to be pretty interchangeable with IRAs, in as much as one can convert his SEP to an problem. I am assuming one can change from IRA to SEP too. Can he??

But the real question is this...can the SEP be set up as a Roth style, or must it always be a traditional IRA style vehicle. That is, can the SEP have Roth characteristics--no deductibility of contributions to the plan, but completely tax free growth??

While a SEP can be transferred to another IRA, the reverse is not true. Once the money is removed from the SEP umbrella, it's removed permanently. Additionally, a SEP cannot be established as a Roth IRA. It's establishment under the tax code doesn't provide for that. Nice if you could, but………….. Good try, though. It shows you're thinking Foolishly.


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