No. of Recommendations: 0
Greetings, JimF555, and welcome. You asked:

I have a few questions for the experienced out there. I received a letter from a former employer that I have approx. $4000 from an SEP that they need to transfer to me. They stated that they are holding it in an escrow account for me until I tell them where to transfer it. It's been 2 years since I worked for them.

My questions are:
1. Does anybody have any experience with a similar situation?
2. What can I put this money into (another SEP,IRA...)or more importantly, where should it go?
3. What is my tax liability?

I have talked to my employers and they say there isn't anything I can switch it into with them (a large hospital corporation). HELP! Any advice would be greatly appreciated.

To avoid any tax problems, you may have this money transferred directly to an IRA of your choice from the SEP-IRA. Any IRA custodian you choose can help you do this. Your problem is only deciding where it should go, to a broker, bank, insurance company or mutual fund. As long as you keep it inside the IRA umbrella, you will have no tax liability. Receive a check for the SEP, though, and fail to deposit it into an IRA within 60 days, and you'll have a problem. You will have to pay taxes on the entire amount plus a 10% penalty on that money if you're younger than age 59 1/2. So pick your IRA investment, tell that agency what you want to do, and then follow their instructions to have the money transferred to that vehicle.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.