Triple Play Investing

Bill asks if he can contribute to an IRA and a Self Employed Pension plan (SEP). Is he able to do that?

QUESTION: Bill asks if he can contribute to an IRA and a Self Employed Pension plan (SEP). Is he able to do that? He’s able to do both, according to Dave.

ANSWER: Yes, you can do both. There’s no limitation on that. You can do a SEP, an IRA and a 401(k). The only limitation is on income. If your household income reaches more than $154,000 married filing jointly, you’re going to run into issues with your Roth IRA. Your SEP has limitations if you have employees who have been with you for more than three of the last five years, and you have to include them at the same percentage of their income. That’s full-time employees; part-time doesn’t count.