Employers can contribute to your plan no matter how old you are. However, you should start taking RMD at age 72 or 70 or 5, depending on the year you were born. No, you are not required to contribute every year. In the years in which you contribute to the SEP, all eligible employees must make contributions to the SEP-IRA, including contributions in the form of IRA in Gold. If you don't meet this criteria, your employer can still choose to contribute to an SEP IRA on your behalf, provided that the employer's least restrictive policies apply equally to all employees and also to the employer.
Employers can contribute to SEP IRAs for employees under 21, who don't comply with the 3-of-5 rule, or who earn less than the dollar threshold. The only requirement is that the same eligibility rules apply to everyone equally. An SEP IRA is a tax-deferred account, meaning that, as with a traditional IRA, contributions are made with pre-tax dollars and withdrawals are taxed as ordinary income. Employees who withdraw their excess contribution (plus earnings) before their federal return deadline, including extensions, will avoid the 6% excise tax imposed on excessive contributions to the SEP in an IRA.
If your company belongs to an industry that is cyclical in nature, the amount of the employer's contribution can be adjusted depending on times of shortage. One of the main advantages of an SEP IRA over a traditional or Roth IRA is the high contribution limit. An employer offering an SEP IRA must contribute a uniform amount, based on the percentage of salary, both to their own SEP IRA and to the SEP IRAs of each eligible employee. However, the amount of the regular IRA contribution that you can deduct on your income tax return may be reduced or eliminated because of your participation in the SEP plan.
They chose this plan because of the cyclical nature of the industry, so in good years they can contribute more, but in the years off they reduce the percentage. Unlike the traditional IRA or the Roth IRA for individuals (which have a specific contribution deadline, usually April 1), SEPs are different. However, since you would be considered an active participant in a business plan, this may prevent you from requesting a tax deduction for an IRA contribution. The SEP IRA does not allow you to make contributions to catch up at age 50, as is the case with other IRAs, because the contributions are made by the employer to the SEP, not by the employee.
The good thing about a self-directed SEP IRA with IRAR is that participants can invest in a wide variety of investment types. If you make a contribution to an SEP IRA during the year, you can still contribute to a Roth IRA or a traditional IRA during the same year, as long as you're eligible. A SEP-IRA account is a traditional IRA and follows the same investment, distribution and reinvestment rules as traditional IRAs. Because a SEP-IRA is a traditional IRA, you may be able to make regular, annual contributions to this IRA, instead of opening a separate IRA.
The 3-of-5 eligibility rule means that you must include in your plan any employee who has worked for you in any of the past 5 years (as long as the employee has met the plan's other eligibility requirements). In general, your correction should place employees in the position they would have been in if the failure had not occurred.
