Using a SEP-IRA as a source of funding for a 72T

L1: Using a SEP-IRA as a source of funding for a 72THi, I plan to start a 72T plan in 2011. I was planning to use my SEP-IRA as one of the funding sources, (obviously I will not be contributing to this IRA any longer) But was wondering if anything about a SEP-IRA account makes it undesirable to use as a source for a 72T. Thanks so much for all the information on this site.Bob.2010-01-04 17:04, By: Bob in the Az , IP: [98.145.25.44]
L2: Using a SEP-IRA as a source of funding for a 72TBob,Since a SEP IRA is just another form of traditional IRA identified to accept employer contributions with limits related to the net earnings of the employer, once you are no longer in business or have need for a SEP IRA, it merely functions as a traditional IRA account. You could also have made traditional IRA contributions to it in addition to the SEP contributions. Once you start a 72t plan, the account cannot accept ANY contributions, but if you choose not to have it re registered to remove the “SEP” label, you can still use it for a 72t plan if you wish, and also in addition to other traditional IRA accounts you want to make part of your SEPP universe.I think I would change the registration first, just to avoid any confusion between “SEP” and “SEPP”. Also, I would NOT use this approach with a SIMPLE IRA because a SIMPLE IRA by definition is NOT a traditional IRA.2010-01-04 18:54, By: Alan S., IP: [24.116.165.60]

L3: Using a SEP-IRA as a source of funding for a 72TThanks Alan!!2010-01-05 16:00, By: Bob in the Az , IP: [98.145.25.44]