SEP IRA Rollover – Designate Direct Transfer
As an employer or an employee, it’s easy to see the benefits of a SEP IRA plan . For the employer, it’s a simple way to provide a retirement savings plan for yourself and your employees. As the employee, the bigger SEP IRA contributions, as compared to a traditional IRA, help you to accumulate retirement savings at a fast rate . But that doesn’t mean you will always want to keep your money in the employer- selected SEP IRA. If you change your employment , you might want to do a SEP IRA rollover to a privately held IRA account. You might get a broader range of investment options with a self-directed traditional IRA. The transfer process is easy . To begin the SEP IRA rollover, set up a traditional IRA. If you have selected the self-directed option, you will need to choose the custodian company to hold the account. It’s an important decision, so choose a custodian who offers a variety of investment products you are happy with, and know what fees to expect for transactions, wire charges, and account maintenance. Once the account has been opened , make a rollover request. Your SEP IRA provider should furnish you with the appropriate paperwork . You then determine the funds you want to move, and instruct where they are going. The new custodian might also have forms that you need to complete . The simplest transfer will be trustee-to-trustee, transferring the assets directly. If instead, you receive a check, you must deposit the funds into the new account within 60 days of the date on the check . Failure to do so will reclassify the SEP IRA rollover as a distribution, and you are subject to taxes and fines. Once the transfer is complete, you will still need to report it on your taxes. You will get a Form 1099R from the SEP provider at the end of the year. Easy ! You’ve successfully completed the SEP IRA rollover.