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Meowiz writes:

<<My husband, 56, receives his partial fed. annuity from taking 'early out', and also is developing his own consulting business. He would be called 'owner-employee' I guess. I have several questions about income from his own business.

1) First, can one contribute to a Keogh or SEP or Simple up till same age as an IRA? (70.5?) I read the Retirement school info, but I don't see this fact there. I do see that money can't be withdrawn before age 59.5 without penalty.>>

Yes, he may. In fact, he may do so after age 70 1/2 provided he has employment income to do so at that time. The normal age 70 1/2 restrictions on IRA contributions do not apply to SEP, SIMPLE or SARSEP contributions. They apply only to traditional IRA contributions a person makes that have no connection with his/her employment. Employer-provided SEP, SIMPLE or SARSEP IRAs are exempt from this requirement.

<<2) Is there a reason that one type of self-empl. retirement acct would be preferable to others, assuming we are able to put in max. amount possible? Why would one select a different type? I know Keogh permits highest percentage, and w/Vanguard, for example, the only fee is $10.00 to join. Other companies are free, as I understand from posts to me here.>>

TheBadger gave you an excellent response to this question. I'll just add that you're really asking questions that are unanswerable by anyone on this board. We don't know enough about your entire financial situation, let alone your goals for the future. Therefore, I strongly urge you not to act on anything said here without seeing your own professional advisors. We can provide general information, but that's insufficient for you on which to base a decision. Indeed, it could lead to some serious problems. Accept our responses for what they are, and that's information only. Do not -- under any circumstances -- think it's all you need to consider.

<<3) If he has a choice between getting an entire grant contract in one large lump sum yearly or paid to him monthly, is there any good reason to get it monthly?

4) Do you think putting max in the retirement acct. is best idea, better than investing it some other way? I know that depends on other things, but excluding the fact that you can't take it out till age 59.5. Aside from that fact, is there some other reason to do it differently?>>

That's another set of unanswerable questions. We don't know your tax situation or your ultimate desires for distribution. Even if we did, it might not be enough to provide a considered answer. Only your tax advisor, estate planning attorney or financial planner (or all acting together) can adequately address these issues.

I think Fooldom is great or I wouldn't be here. I agree you can find a wealth of information available on our boards. But I worry a lot when I see questions such as yours. I fear you may take our responses as gospel, and that's far from true. Use our responses as background only for knowledgeable discussions with the professionals you consult. Those are the folks who should be providing you the alternatives so you can make the decisions that are best for you. Unfortunately, we can't -- and shouldn't -- do that.

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