Rachelk

I’m a stay at home mom, and started working full-time for the first time late last year. I did some part time in the past, when I was at college, 15 odd years ago! I received a check from my client in January for work done in Dec. My contract with them is up end Feb but it’s lucrative project and I was hoping to finally put some money away for retirement. Unfortunately I put 3k in a SEP IRA and now fidelity is telling me I cannot have a SEP and 401(k) in the same year. I don’t have enough income in 2020 for a 3k SEP contribution, so that would have to be for 2021. My 401k effective date was 01/01/2020 but I have some startup expenses for my business that, if I write off, don’t have any net income for 2020. Thus looks like 2020 -> no net income, no retirement contributions 2021 -> SEP + traditional IRA is there any way for me to scrap the SEP and just do 401k + traditional IRA for 2021 without early withdrawal fees/penalties? Fidelity doesn’t let you just reallocate. Is there any advantage to having the SEP over a 401k? thanks!

I am self-employed and decided to open a 401(k) very last minute in Dec. I signed and submitted the adoption docs to fidelity on 12/31/2020 with an election of 10,000 for 2020. I meant to make that election for 2021. Fidelity opened my 401(k) mid-jan. Does that mean my 401(k) is active 2021 onwards and NOT for 2020? Do I still have to contribute 10k for 2020 or can that little bit of election on the adoption agreement be forgotten/ignored?