Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Greetings, Jeannotte, and welcome. You wrote:

<<Approximately 2 or 3 yrs ago I read an article somewhere that indicated you should open an SEP if you get a chance to. As I recall they mentioned it would be beneficial to transfer all of my 401k and 403b into it at retirement. I am 2 or 3 years away from that time, I do have the SEP ready and willing, but now I am not sure why. Can anyone clear this mystery up for me ????? >>

My guess is the article you read was touting the benefits of tax deferral on your contributions and earnings while working. As to the transfer of 401k and 403b money to a SEP-IRA in retirement, my guess again is the article suggested consolidating those tax deferred accounts into one IRA in retirement for ease of administration.

Bear in mind that a SEP-IRA is in reality only a name given to a traditional IRA that has been designated to receive an employer's contributions under a Simplified Employee Pension agreement. Once the contribution reaches that IRA, the IRA is just like any other. Thus, it may receive transfers from other IRAs or from other employers' qualified pension plans. In retirement you don't expect to return to work and participate in another 401k plan or the like. Therefore, transferring money from one of those plans to a SEP-IRA for consolidation purposes can make sense.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.