Can I Combine a SEP IRA & 401(k)?

Working for multiple companies may mean multiple retirement plans.

Jupiterimages/Polka Dot/Getty Images

If you've worked multiple jobs, it's not uncommon to have your retirement savings spread across different companies and different types of plans, such as SEP IRAs and 401(k)s. Both plans offer the same tax-sheltered growth benefits, but combining them makes it easier to keep track of your retirement savings.

Combinations Allowed

The IRS allows you to combine money in a SEP IRA with money in a 401(k) plan, either by moving the SEP IRA money to the 401(k) or the 401(k) money to the SEP IRA. Since both accounts offer pre-tax savings, you won't pay any taxes when you move the money. However, the IRS doesn't require that SEP IRAs or 401(k)s accept rollovers from other plans, so it's possible that even though the IRS permits it, your employer plan will not accept the rollover.

Combination Methods

Assuming the plan accepts money from other retirement plans, you can use either a rollover or a transfer to move the money from your SEP IRA to 401(k) or vice versa. To do a transfer, just tell your plan administrator where to move the money and it gets moved automatically without being paid to you. With a rollover, you request a distribution from one plan and then redeposit it in the other plan no more than 60 days later.


You're allowed to take money out of your SEP IRA whenever you want and roll it to another plan, including a 401(k). IRS Publication 560 explicitly prohibits employers from making SEP IRA contributions that require you to leave the money in the plan for a certain period of time. By contrast, you can't get your money out of your 401(k) whenever you want. Instead, distributions are only permitted after you've reached 59 1/2, left the company or, if your plan allows, suffered a financial hardship. What's more, hardship distributions aren't allowed to be rolled over.

Alternative Combination

If you have money in both a SEP IRA and a 401(k) plan, but don't particularly like either plan, you can roll money from both plans into a traditional IRA. Doing so lets you keep the tax-sheltered growth offer by SEP IRAs and 401(k)s, but gives you complete control over how the money is invested because you can pick your financial institution and investments. Plus, you don't have to worry about whether your employer plan accepts rollovers from other plans. So, if neither your SEP IRA nor your 401(k) accepts rollovers from other plans, you can still combine the money from the plans in a traditional IRA.