Switching from Vanguard SEP IRA to an Individual 401K

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edward_2
Posts: 10
Joined: Sat Mar 09, 2019 9:54 am

Switching from Vanguard SEP IRA to an Individual 401K

Post by edward_2 »

Hi everyone,

My wife is a self-employed psychologist and is currently contributing to a Vanguard SEP IRA. Her gross annual income is about $250,000. Her accountant currently has her contributing around 41,000/yr. After doing some reading about different self-employed retirement plans, it seems she could contribute more to an i401K plan, with a side benefit of taking advantage of the Backdoor Roth.

Our plan is to open an i401K in this year with the plan to begin contributions in 2022, stopping all SEP IRA Contributions, and perform a Backdoor Roth IRA.

It seems like our next steps will be:

1) Open i401K
2) Roll-over SEP IRA to the i401K account. I read in previous posts that Vanguard does not accept a SEP IRA roll-over. Does that mean we would need to create an outside account (ie Fidelity)?
3) And if we do create this account, could we eventually move the i401K back to Vanguard.

Am i missing any steps? Thank you in advance!
roth evangelist
Posts: 149
Joined: Wed Jul 01, 2020 9:56 pm

Re: Switching from Vanguard SEP IRA to an Individual 401K

Post by roth evangelist »

This is mostly to bump, but for 2) if I'm not mistaken you would rollover the SEP-IRA to an IRA and then the IRA to the i401(k). Someone can correct me on that though.
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