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I have a few thousand dollars in a SEP IRA account at Merrill Lynch. It started accumulating in 2001 when the market seemed to be going nowhere but down, so it's been sitting in cash (for too long, clearly).

I also have both a rollover IRA (from when I left a previous job) and a 401k account.

My question is this....

Can I roll the SEP IRA funds into either my existing rollover IRA or the existing 401k without incurring some sort of fine or penalty?


Caveat: I'm speaking only to tax law. Your existing custodian(s) will probably impose a fee. Also, some custodians don't recognize the fact that SEP is simply a method of getting money into a traditional IRA and won't accept non-SEP deposits into a "SEP" account or allow SEP deposits into a vanilla traditional IRA. This is not a restriction of tax law, and my standard advice applies: find a custodian who realizes whose money it is. Ameritrade is one such custodian; I'm sure there are others. The "Find a Broker" link at the above left may be useful.

Rollover rules have been liberalized in the last few years. You can definitely roll the SEP funds into the traditional (your "rollover") IRA or vice versa. Whether you can roll either into your current employer's 401(k) depends on the plan rules.

Phil
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