How to Withdraw From a SEP IRA

By: D. Laverne O'Neal

SEP-IRA withdrawal rules are like traditional IRA regulations.

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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.

Step 1

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.

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About the Author

D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.

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