Rollover Mechanics

• Distributions and rollovers from SEP accounts are subject to the same rules as those for a Traditional IRA. Combining all SEP and Traditional IRA accounts into one IRA should be relatively simple. The mutual fund or brokerage company you choose will help you with the mechanics.
  
  

Rollover Advantages

• Having all your tax-deferred money in one account will give you more flexibility in managing your assets. Combining all IRA assets also simplifies distributions. In both SEPs and IRAs, you must begin receiving distributions the year after you turn 70½. The required minimum distribution must be calculated separately for each IRA account. Dealing with a single IRA account makes the math easier.
  
  

Rollover Disadvantages

• All SEP contributions are pre-tax. If you have some after-tax contributions to your IRA, there is some minor disadvantage from mingling pre-tax and after-tax funds. For example, if you are planning to convert a portion of your Traditional IRA to a Roth IRA, you will be able to convert tax-free an amount that is equal to the percentage of after-tax money in the account. Make the conversion before bringing in the SEP money, which would lower the percentage of after-tax funds.
  
  

401(k) Rollover Option

• Some 401(k) plans allow rollovers from SEPs or Traditional IRAs. Although you likely would have far more investment options through a SEP or the IRA, there are a couple of reasons to consider a 401(k):
  If you live in a state that does not protect IRAs from creditors.
  If you want to separate pre-tax and after-tax IRA contributions. That might allow you a larger amount of money that you could convert tax-free to a Roth IRA.
  
  

Roth Conversion

• A SEP can be converted directly to a Roth IRA. The rules that govern the conversion of a Traditional IRA to a Roth apply: The conversion must be completed before December 31 of the tax year, and all money converted will be considered---and taxed---as ordinary income. The mutual fund or brokerage company you choose for the Roth account will help you with the mechanics.