KimberW
Employee Tax Expert

Retirement tax questions

As long as your brokerage firm is maintaining segregated accounts (or sub-accounts) for you, then that is sufficiently "separate". It sounds like they are maintaining segregated account information for each type because you are able to specify the source of withdrawals.

 

But -- it does mean that the entirety of your traditional 401(k) account at this brokerage would be subject to the Series of Substantially Equal Periodic Payments (SoSEPP). You would not be able to make any other withdrawals from the traditional 401(k) during the life of the SoSEPP, nor would you be able to convert funds from your traditional 401(k) to a Roth IRA.

 

Distributions from your Roth 401(k), though, are not distributions from your traditional 401(k) account and would not affect your SoSEPP.

 

The IRS provides some question and answer details about SoSEPP plans Substantially Equal Periodic Payments and the discussion in this community post may also be helpful.


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