Submitted By: Peg
Answered: February 12, 2016 12:07 pm

I turned 70-1/2 this year and will take my first required minimum distribution by December 31. I’m self-employed, so can I continue to make contributions to my SEP?

Yes. Even though you are required to start drawing down the account, you can continue to add to it through deductible contributions as long as you have net earnings from self-employment. However, you can no longer contribute to a traditional IRA if you had otherwise been able to do so; no contribution is allowed for the year in which you turn age 70-1/2 or any later year. There is no age limit for making Roth IRA contributions as long as you continue to have earned income.

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Tax Glossary

Annualized rate

A rate for a period of less than a year computed as though for a full year.

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