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Taking Required Minimum Distributions From Simplified Employee Pensions

The RMD rules for these retirement accounts for the self-employed are the same as for traditional IRAs.


I’m self-employed and have a simplified employee pension. Do I need to take a required minimum distribution from my SEP like I would from a traditional IRA? If so, can I take it from any IRA?

See Also: 10 Things Boomers Must Know About RMDs From IRAs

The required minimum distribution rules for SEPs are the same as they are for traditional IRAs: You must start taking withdrawals at age 70½ -- although you have until April 1 of the year after you turn age 70½ for the first withdrawal, then you must take required withdrawals by December 31 every year after that.

You must calculate the required amount separately for each IRA, including traditional IRAs, rollover IRAs, SEP IRAs and Simple IRAs (Roth IRAs aren't subject to RMDs). But you can add up the RMDs from all of those accounts and take the withdrawals from one or any combination of those accounts, says Maura Cassidy, director of retirement for Fidelity Investments.

For more information about RMDs, see our Required Minimum Distributions special report.

See Also: RMD Tips for Retirees Taking Their First Required Minimum Distributions

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