--- title: Can I Fund One Type of IRA While Tapping Another? description: Regardless of whether you take the standard deduction or itemize deductions, you can deduct eligible contributions. authors: - name: Sarah Max url: https://money.com/author/sarah-max/ at_money_since: 2015 articles: 90 covers: - Retirement - Business - Career Advice - Credit - Housing - Insurance - Investing - Personal Finance - Taxes former_staff: true published: '2015-12-21T20:14:43.000Z' modified: '2024-04-16T09:28:23.000Z' section: Retirement tags: - Ask the Expert - IRA - roth word_count: 334 canonical: https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Investing illustration](https://img.money.com/2014/09/140605_askexpert_investing_illo.jpg?crop=0px%2C892px%2C2100px%2C1181px&quality=85) **Q: I’m 67 and self-employed. Can I contribute funds to a traditional or SEP IRA in the same year in which I withdraw funds from a Roth? – Stan** A: As a matter of fact, you can. And depending on your current tax situation, this may not be such a bad idea, says Joe Heider, founder of Cirrus Wealth Management in Cleveland. Regardless of whether you take the standard deduction or itemize deductions, you can deduct eligible contributions to a traditional IRA or a Simplified Employee Pension Plan, otherwise known as a SEP IRA, commonly used by self-employed individuals or small-business owners. Because you’re over the age of 50, you also qualify for catch-up provisions, meaning you can contribute up to $6,500 in a traditional IRA. For someone in the 25% tax bracket, that translates to savings of $1,625 in federal taxes. “You’re essentially using tax-free funds from your Roth to get a current deduction,” says Heider. You will, of course, owe taxes when you withdraw funds from a traditional IRA or SEP down the road. As long as your tax rate doesn’t go up in retirement, which is unlikely, it pencils out. Since you’re self-employed, you could potentially contribute more pre-tax dollars to a SEP IRA. There is no catch-up provision with a SEP, but the contribution limit is up to 25% of your compensation. (That figure varies slightly depending on whether you work under an unincorporated or incorporated entity.) Keep in mind that the money you withdraw from a Roth doesn’t count as your eligible compensation. Those withdrawals, though, may free up more of your earned income for savings. Also remember that when you turn 70 ½ you’ll still be subject to required minimum distributions from your traditional IRA, and that means [you’ll need to withdraw a small percentage](https://money.com/required-minimum-distribution-ira-rules/) of your savings from your account. At that point, you can continue contributing to a Roth IRA — assuming you still have earned income and you qualify — though not a traditional IRA. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "IRAs", "item": "https://money.com/iras/" }, { "@type": "ListItem", "position": 4, "name": "Can I Fund One Type of IRA While Tapping Another?" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/#webpage", "url": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/", "name": "Can I Fund One Type of IRA While Tapping Another?", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2015-12-21T20:14:43.000Z", "mainEntity": { "@id": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/#breadcrumb" }, "dateModified": "2024-04-16T09:28:23.000Z" }, { "@type": "Article", "headline": "Can I Fund One Type of IRA While Tapping Another?", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2014/09/140605_askexpert_investing_illo.jpg?crop=0px%2C892px%2C2100px%2C1181px&quality=85", "width": 1012, "height": 569, "caption": "140605_AskExpert_Investing_illo" } ], "author": [ { "@type": "Person", "name": "Sarah Max", "url": "https://money.com/author/sarah-max/", "@id": "https://money.com/author/sarah-max/#author" } ], "publisher": "https://money.com/#organization", "datePublished": "2015-12-21T20:14:43.000Z", "description": "Regardless of whether you take the standard deduction or itemize deductions, you can deduct eligible contributions.", "abstract": "Regardless of whether you take the standard deduction or itemize deductions, you can deduct eligible contributions.", "@id": "https://money.com/can-i-fund-one-type-of-ira-while-tapping-another/", "inLanguage": "en-US", "dateModified": "2024-04-16T09:28:23.000Z", "wordCount": 334, "keywords": [ "Ask the Expert", "IRA", "roth" ], "about": [ { "@type": "Thing", "name": "Retirement", "sameAs": [ "https://en.wikipedia.org/wiki/Retirement" ] }, { "@type": "Thing", "name": "Individual retirement account", "sameAs": [ "https://en.wikipedia.org/wiki/Individual_retirement_account" ] } ] } ] } ```