Should I contribute $5,500 from my tax return to an existing simplified employee pension (SEP) IRA, or open a new traditional IRA account? 

Me and my spouse were active contributors to our employer 401(k) plans in 2017. I have a simplified employee pension (SEP) IRA account from a past employer. I would like to contribute my 2017 tax return to an IRA account. If I want to contribute $5,500, should I open a new traditional IRA account or should I contribute to my existing SEP IRA account?

401(k), IRAs, Taxes, Retirement Plans
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March 2018

Love that you are putting your tax refund to good use.  If you do not have self employed income (it sounds like your don't) you will not be able to contribute to the SEP IRA.

 

So, you should make the contribution to a IRA account, or to make life easier you can increase you contributions to the 401(K) plans by $5500 for the year.

 

I'm a big fan of keeping things simple, if you open an IRA, you can rollover your SEP into the IRA- main purpose would be to have less accounts to keep track of.

 

Best of luck.

March 2018
March 2018