Inheriting a traditional IRA - can I combine with my SEP IRA for retirement?

Wait, I'm confused. So OP can't roll it over, but they also don't have to wait until 59½? And there's no 10% penalty? But Wells Fargo told them there would be. Why would Wells Fargo give incorrect info about that part?

You're right to question this. The information from Wells Fargo appears to be partially incorrect. The part about not being able to roll an inherited IRA into their own SEP IRA is correct. However, the part about waiting until 59½ or facing a 10% penalty is incorrect for inherited IRAs. With inherited IRAs, the 10% early withdrawal penalty does not apply, regardless of your age. The 59½ age threshold only applies to your own IRAs, not inherited ones. All distributions from the inherited IRA are still taxable as ordinary income, but without the additional 10% penalty. Wells Fargo may have confused the rules or the representative wasn't fully educated on inherited IRA regulations.

How accurate is this service? I have an inherited 401k from my uncle and getting conflicting advice about what I can do with it. Does it actually work with complicated situations?

I dunno, seems like a paid recommendation. Are there actual CPAs reviewing your docs or is it just some AI spitting out generic advice you could get from Google?

The service is pretty accurate for inheritance situations - it references the actual tax code and regulations. It flagged that pre-2020 and post-2020 inherited accounts have different rules, which my financial advisor had missed. It's not just generic advice - it analyzes your specific documents and provides personalized recommendations based on your situation. There are tax professionals who review complex cases, though straightforward situations like standard inherited IRAs are handled automatically. I was skeptical too until I saw how detailed the analysis was about my specific inherited IRA CD and the transfer options available to me.

How does this service actually work? Sounds like magic or a scam. The IRS never answers their phones.

Yeah right. Nobody gets through to the IRS in 20 minutes. I've been trying for weeks. What's the catch? Do they charge like $100 for this "service"?

It works by essentially waiting on hold for you. You register your phone number, and their system calls the IRS and navigates through all the initial prompts and holds in the queue. Once they reach a real person, the system calls you and connects you directly. It's basically like having someone else wait on hold instead of you. No catch beyond the service fee, which I thought was completely worth it. I was able to do other things instead of being stuck listening to the IRS hold music for hours. And yes, they actually do get through - the IRS does answer eventually, it's just that most people give up after being on hold for too long. Having a system that never gives up made all the difference.

That's a fair point about the simplicity. I guess I was just frustrated with having multiple accounts in different places and the CD rate seemed low compared to my index funds which have been doing well. Are there any downsides to transferring it to another institution as an inherited IRA like others suggested?

The main downsides to transferring would be paperwork hassles and potential for errors. Some financial institutions aren't very experienced with handling inherited IRAs, which operate under different rules. If you do decide to transfer, make absolutely sure it's done as a direct trustee-to-trustee transfer of an inherited IRA. Don't let them give you a check or close the account, as that would trigger full taxation. Also ensure the new account is properly titled as an inherited IRA with the original owner's name and your name as beneficiary. Finally, confirm the new institution understands you're subject to the pre-SECURE Act RMD rules based on your life expectancy. When done correctly, the transfer itself isn't taxable.

Where did you hear this? I haven't seen anything about changes to inherited IRA rules in the current tax proposals. Do you have a link?

You're right to question this. I should have been more specific. There's no direct "Tax Reform 2.0" package targeting inherited IRAs specifically right now. What I was referring to are some of the ongoing discussions around retirement security legislation following the SECURE Act 2.0 passed in 2022. There are occasionally proposals floated about harmonizing pre-2020 and post-2020 inherited IRA rules, but nothing concrete has advanced through committees. I apologize for creating unnecessary concern. The current rules for pre-2020 inherited IRAs like the OP's should remain stable for the foreseeable future, and I shouldn't have implied otherwise without specific legislation to reference.