Best time to start using SEP-IRA?

[Unionville]

I just read that I can start withdrawing SEP at 59 1/2 and that you must start withdrawing at 72.  For some reason I thought you had to wait until you are 65 to use a SEP or else there would be penalties. 

My question: Is there an ideal age to start using the sep? I am 62, FI, and have about half of my Non-Ira assets (in the stock market), and the other half in SEP (mostly Bond Funds) - But it feels scary to start cashing out the SEP.  Any guidelines on when it makes sense to start withdrawing?  Or should I just leave it alone until 72?

[seattlecyclone]

You can think of the SEP as the same as any other traditional IRA. I don't think there's any difference as far as withdrawals are concerned. You could even roll your SEP into your other IRA to simplify things.

Withdrawal strategies can be a complicated topic! A lot depends on how much money you have, what types of accounts it's in, and how much you spend each year. As a general rule of thumb the way to minimize your taxes is to keep your income as even as possible from year to year. If your IRA balances are large enough that RMDs will cause your income to increase dramatically, it's worth considering getting ahead of that by converting some to Roth now.

[Unionville]

Thanks for bringing up your points. I had not considered all those different issues.