SEP IRA into Traditional IRA?

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jlmitnick
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Joined: Thu Oct 22, 2009 11:39 am

SEP IRA into Traditional IRA?

Post by jlmitnick » Mon Jan 13, 2020 9:38 am

I have a SEP IRA from when I was self-employed. I’m no longer self employed, and don’t anticipate ever contributing to this SEP ever again. Is there any reason, or is it even possible, to change this account type to be a “traditional” Ira?

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RickBoglehead
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Re: SEP IRA into Traditional IRA?

Post by RickBoglehead » Mon Jan 13, 2020 9:41 am

No, you cannot change the account. You can do a TRANSFER into a traditional IRA or convert to a Roth IRA. Either action will be done to a new account.
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Spirit Rider
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Re: SEP IRA into Traditional IRA?

Post by Spirit Rider » Mon Jan 13, 2020 9:57 am

While of no benefit for the vast majority of people. A SEP IRA has unlimited federal bankruptcy protection. A traditional IRA is limited to $1,362,800, next adjusted 4/1/2022. So only if you have very large traditional + SEP IRA balances would this be a concern.

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Wiggums
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Re: SEP IRA into Traditional IRA?

Post by Wiggums » Mon Jan 13, 2020 10:03 am

RickBoglehead wrote:
Mon Jan 13, 2020 9:41 am
No, you cannot change the account. You can do a TRANSFER into a traditional IRA or convert to a Roth IRA. Either action will be done to a new account.
+1

It needs to go to the same type of account.

Spirit Rider
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Re: SEP IRA into Traditional IRA?

Post by Spirit Rider » Mon Jan 13, 2020 10:45 am

Wiggums wrote:
Mon Jan 13, 2020 10:03 am
RickBoglehead wrote:
Mon Jan 13, 2020 9:41 am
No, you cannot change the account. You can do a TRANSFER into a traditional IRA or convert to a Roth IRA. Either action will be done to a new account.
It needs to go to the same type of account.
In addition to those identified by @RickBoglehead. It can also be rolled over to a SIMPLE IRA (>= 2 years after 1st contribution) and a pre-tax (401a 401k, 403b, and governmental 457b account)

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