Wednesday, November 12, 2008

An Indie Business Mindset Regarding Pensions

Hi June,

I'm a sole proprietor who has contributed to SEP IRAS for the past 10 years. Currently, I joined a credit union that doesn't offer SEP IRAs, but has some attractive CD rates for a traditional IRA. I was wondering if I could take some of my money out of my SEP IRA at the brokerage house [It is invested in a money market fund.] and roll it over to a traditional IRA at the credit union. [I would invest it in a CD.]

I would still continue future SEP IRA contributions to the brokerage account.

Franklin Square, NY

Dear Frank,

Very clever. Yes, you may roll over any kind of pension into an IRA. You can't mix and match ROTH IRAs with traditional IRAs, though.

If, as an indie, you are looking to contribute more to a pension, consider a UNI-k. Also known as a solo-k, individual 401-k or a solo-k.


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