sep-ira account
I have a client with a mutual fund sep-ira account for many years; the employer company that sponsored the plan has been out of exitence for many years.
Is there any reason to transfer the sep-ira to a traditonal ira?
I have a client with a mutual fund sep-ira account for many years; the employer company that sponsored the plan has been out of exitence for many years.
Is there any reason to transfer the sep-ira to a traditonal ira?
Permalink Submitted by Jose Morales on Wed, 2008-12-03 20:58
The client’s account was actually a Traditional IRA in which the employer made SEP constributions. As soon as the funds were deposited into the account they are just like any other Traditional IRA funds that your client may have had and are treated as such.
Permalink Submitted by Denise Appleby on Fri, 2008-12-05 00:35
[quote=”[email protected]“]The client’s account was actually a Traditional IRA in which the employer made SEP constributions. As soon as the funds were deposited into the account they are just like any other Traditional IRA funds that your client may have had and are treated as such.[/quote]
Notwithstanding, transferring the balance to a regular (non-SEP) traditional IRA may not be a bad idea. During the recent amendment period for SEP IRAs, many SEP participants received amendment notifications that they should not have received as they were no longer participant’s in SEP IRAs. That was not difficult to address or handle, but the confusion and calls to the IRS and the custodian could have been avoided, had the amounts been transferred to traditional IRAs. Also, some custodians charge higher admin fees for SEPs