Looking to activate a SEPP plan in 2023 to distribute 30kish a year for 9 years (50 years old in 2023). Using the fixed amortization method that would require a sum of about 500k in the SEPP universe allocated to the plan. The first distribution of the full annual amount would be in November 23 and then the same annual amount would be distributed annually starting in Jan 24 (so there would be a temporary large infusion in the next few months which is convenient)

Considering 2 options. A Fidelity 401k w a former employer with about that amount OR rollover about half the 401k to an existing traditional IRA at Vanguard where there is also a sepira with 250k and creating a SEPP universe consisting of the vanguard traditional IRA and the sep IRA totally 500k.

The conventional wisdom I have read so far is to avoid trying to set up a SEPP directly against a 401k. Some concerns over lack of control I think compared to your own IRA accounts. Is this valid conventional wisdom or would the rollover be pointless? I think fidelity would allow SEPP distributions from the 401k and I don’t think any institution codes the distributions any differently. Fidelity did seem to insist on tax withholding at at least 20% which wasn’t convenient but not a deal breaker. Thoughts on these options or any flaws in how I’m describing the plan?