If I make the maximum contribution to my Roth IRA, can I contribute to my SEP-IRA?
I am 61 years old and self-employed.
If you are self-employed and are the sole proprietor (only owner) of the business, you are allowed to max out your SEP-IRA (cannot exceed the lesser of 25% of compensation or $53,000 in 2016) and still contribute to your Roth IRA.
If you have any further questions, I'd be happy to help.
As a self-employed individual, the maximum contribution to a SEP IRA for 2016 is 25% of compensation, up to $53,000. In 2016, the maximum compensation limit is $265,000. SEP IRA are pre-tax contributions. For single filers, the phase-out starts at $117,000 and they become ineligible to contribute at $132,000. For married filers, the phase-out starts at $184,000, and they become ineligible at $194,000. Provided that you meet the income limits, you can also contribute to a Roth IRA. In 2016, the maximum contribution for taxpayers over 50 is $5,500 base contribution + $1,000 catch-up contribution = $6,500. So, yes- you can accumulate more wealth for retirement by taking advantage of tax-deferred and tax-free investing!