- Can I Withdraw From My SEP-IRA to Pay for My Kids' College?
- Where Can I Find Closing Prices for Stocks?
- Limitations of IRA Withdrawal
- Factors Contributing to Exchange Rate Risks
- Can I Take a Health Savings Account Deduction Even If I Take the Standard Deduction on My 1040?
- The Best Mutual Funds for Senior Citizens
Contributions to a SEP-IRA come directly from the employer. In fact, the company can put up to 25 percent of your salary into a SEP. When it comes to withdrawals, however, the rules are identical to those of a traditional IRA. All withdrawals are subject to income tax. If you take money out before age 59 1/2, you pay a 10 percent penalty on top of the income tax. And at age 70 1/2, you must begin taking required minimum distributions.
Contact the SEP-IRA trustee to inform him of your plans to make a withdrawal. You might have to download or pick up a distribution form to fill out.Step 2
Tell the trustee how much you want to withdraw and in what form. You have the option of requesting the funds by check or having them transferred electronically to a personal checking or savings account. If you choose electronic transfer, provide the bank routing number, along with the transfer-to account number. To deliver a check by mail or courier, the trustee needs a valid address. If you have had to provide this information by filling out a form, sign and date it and submit it to the trustee.Step 3
Check the mail or your online bank statement to confirm the transfer has been made. Such a transfer might take seven or more business days. When you receive a check, you must also account for delivery time.
- When you turn 70 1/2, required minimum distributions are calculated using figures from an IRS life-expectancy table. Typically, the SEP-IRA trustee will make the calculation and send you the RMD every year.
- Jupiterimages/liquidlibrary/Getty Images