Yes, but not always. Consult your tax advisor.

Whatever you'd like upon distribution. With a few exceptions, you cannot tap into the funds until age 59 1/2 (without a penalty).

If you qualify, you can contribute up to a maximum of $5,000 a year out of your earnings ($10,000 for married couples). Tax payers age 50 and over may contribute an additional $1000. You cannot deduct the money from your income as you do with a traditional IRA. You fund this plan with your after-tax dollars. You cannot contribute more than you (and your spouse) have earned.

For 2008 you can make the full contribution if you are married with a combined adjusted gross income up to $159,000, or single with an adjusted gross income up to $101,000. Partial contributions are allowed for couples with a combined income filing jointly up to $169,000 and up to $116,000 for a single.

You can make your full contribution in one deposit or you could make smaller deposits. If your employer is willing to make payroll deductions you can even contribute weekly or monthly.

The employee opens a traditional IRA, to which employer contributions are deposited. Contributions are never withheld from pay or made by employees (other than the self-employed person). Contributions are not given directly to the employee, but sent to the employee’s IRA custodian. The employee is immediately and fully vested.

A SEP allows a self-employed person to contribute more to a retirement account than the current limits on 401(k) and IRA. For a sole-proprietor, the maximum contribution is 20% of net operating income, up to $46,000. If a small business owner allocates a specific amount of cash flow to salaries, the maximum SEP contribution is 25% of compensation, up to $46,000. There is no upper age limit on participation in a SEP.

All eligible employees of the small business owner must receive a SEP contribution representing the same percentage of compensation. The percentage is determined by the business owner each year, and may be as much as 25% or as little as zero. An employer may exclude employees who:

• are under age 21
• have not worked at least 3 of the preceding 5 years for the employer
• earned less than $450
• are part of a collective bargaining agreement
• are nonresident aliens

No, but the employee participant may convert the SEP IRA into a Roth and pay the tax due on the conversion.

The plan must be established and the contributions completed by the employer’s tax-filing due date, usually by April 15 following the tax year for which the deduction is taken.

Yes. The contribution limit is the lesser of 20% of net operating income or $45,000.

If the SEP participant’s modified adjusted gross income (MAGI) for 2008 is under $53,000 (single filer) or under $85,000 (married, joint filer), then a full deduction for a traditional IRA contribution is also permitted. The deduction is phased out over the next $10,000 in income for single filers, $20,000 for married filing jointly.

If, in a calendar year, the employer does not make contributions to the employees’ SEP IRAs, then every employee is eligible to make and deduct contributions to a traditional IRA, regardless of income.

As for Roth contributions, if the individual’s MAGI is under $101,000 (single) or $159,000 (married, joint filer), then their Roth IRAs may be fully funded. Eligible Roth funding is phased out for incomes up to $116,000 (single) or $169,000 (married).

An employer is not required to include an employee who is under 21 years old. There is no upper age restriction.