Managing Your Money

Contributions to a SEP-IRA when you are no longer self-employed

I have a SEP IRA from when I was self-employed. I now work for another employer that has a 401(k) plan. Can I continue to make contributions to my SEP IRA if I am no longer self-employed?

A SEP IRA is a type of employee pension plan that allows employers to make contributions towards their employee’s retirement as well as their own retirement (if they are self-employed). If you are no longer self-employed and earning income from that business, you will not be able to continue to make contributions to that SEP IRA because contributions are based on earnings from that business.

If the SEP IRA is no longer active, you generally have a couple of options including keeping the SEP IRA account as is (and not making any additional contributions) or terminating the SEP IRA plan and rolling your account over to an IRA. If you choose to terminate the plan, you can do so by contacting the financial institution that administers your plan. Although it is not required, you should let your former employees (if you had any) know that you will not be making any additional contributions and that the plan will be discontinued. You do not need to contact the IRS to let them know that you are terminating the plan.

More information on SEP IRAs, can be found in IRS Publication 560 at

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