What Should I do with my SEP IRA after I Retire?
Jason Stolz CLTC, CRPC
When retirement finally arrives, many people holding a SEP IRA face the same question: What should I do with my SEP IRA after I retire? Your decision matters because a SEP IRA often represents decades of contributions, tax-deferred growth, and employer-funded savings. How you use it now will influence your income stability, tax exposure, and long-term financial security.
At Diversified Insurance Brokers, we help retirees turn their SEP IRAs into predictable, tax-efficient income strategies. Whether your goal is guaranteed income, principal protection, or long-term growth, understanding your options ensures you make the most of the account you spent years building.
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See Fixed Annuity Rates | See Bonus Annuity RatesUnderstanding How Your SEP IRA Works in Retirement
A SEP IRA operates similarly to a traditional IRA, but with higher contribution limits and employer-funded deposits. Once you retire, it becomes your responsibility to determine how the account will support your new lifestyle. If you need a refresher on how SEP IRAs function, you can review our guide How Does a SEP IRA Work?.
Your SEP IRA continues to grow tax-deferred, but withdrawals are taxed as ordinary income. That means your post-retirement strategy should focus on managing taxes, creating reliable income, and protecting the account from market volatility that can threaten your long-term security.
Option 1: Keep Your SEP IRA Where It Is
You can leave your SEP IRA right where it is after retirement. This option works best if your investment lineup is strong, fees are low, and your tolerance for market risk remains high. While keeping it invested may lead to continued growth, it also leaves your retirement income vulnerable to sequence-of-returns risk—market losses early in retirement that can permanently damage your nest egg.
For retirees who prefer more stability, guaranteed income, or protection from downturns, a SEP IRA rollover into a fixed or indexed annuity is often a safer alternative.
Option 2: Roll Your SEP IRA Into an Annuity for Safety and Lifetime Income
One of the most common strategies—especially for risk-conscious retirees—is rolling a SEP IRA into a fixed annuity or fixed indexed annuity. These solutions provide:
• Guaranteed principal protection Your SEP IRA is shielded from stock market downturns.
• Steady, predictable growth Fixed annuities offer guaranteed multi-year interest rates, while indexed annuities offer growth tied to market indexes without losses.
• Optional lifetime income You can convert a portion of your SEP IRA into a guaranteed retirement paycheck you can never outlive.
• Tax deferral continues Your funds maintain tax-deferred growth inside the annuity.
If you’re considering a rollover, start with our guide: How to Transfer a SEP IRA to an Annuity.
Annuities allow you to take control of your retirement income. Instead of worrying about market dips or unpredictable returns, many retirees choose annuities specifically because they provide stable yields and guaranteed income streams.
Option 3: Convert Your SEP IRA to a Roth IRA
Some retirees consider a Roth conversion to reduce required minimum distributions (RMDs) later in life and secure tax-free income. A Roth conversion works well if you expect higher taxes in the future or want to leave a tax-efficient legacy. However, you must be prepared to pay taxes on the amount converted.
Option 4: Begin Taking Withdrawals—But Be Strategic
Once retired, most people begin taking withdrawals from their SEP IRA. But simply withdrawing money without a plan can lead to unnecessary taxes and premature depletion. Your strategy should consider:
• Required minimum distributions (RMDs)
These start at age 73 (based on current IRS rules).
• Income sequencing
Coordinating SEP IRA withdrawals with Social Security, pensions, and annuity income.
• Tax bracket management
Large withdrawals may push you into a higher tax bracket.
A properly structured annuity can help manage these variables by providing predictable income while reducing the need to make large taxable withdrawals.
Using Your SEP IRA to Create Lifelong Guaranteed Income
A SEP IRA is a powerful tool—but in retirement, its most valuable function may be as a source of guaranteed lifetime income. Many retirees shift part of their SEP IRA into an annuity with an income rider designed to produce a “retirement paycheck” that continues for life.
This approach provides stability, reduces exposure to market losses, and ensures you never outlive your money.
Lifetime Income Calculator
Use this calculator to estimate how much guaranteed income your SEP IRA rollover could produce:
How Diversified Insurance Brokers Helps Retirees With SEP IRA Decisions
We are a nationwide, independent insurance agency specializing in safe-money strategies. We compare over 75 carriers to help retirees:
• Generate guaranteed retirement income
• Protect their SEP IRA from market volatility
• Compare the best fixed and indexed annuity rates
• Make tax-efficient withdrawal and legacy decisions
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FAQs: What Should I Do With My SEP IRA After I Retire?
Can I roll my SEP IRA into an annuity after I retire?
Yes. A SEP IRA can be rolled into a fixed annuity or indexed annuity to create guaranteed income, protect principal, and maintain tax deferral.
Do I have to take RMDs from a SEP IRA?
Yes. Required minimum distributions begin at age 73 unless IRS rules change. Annuities may help manage RMD timing and taxes.
Should I keep my SEP IRA invested after retirement?
You can, but market volatility may threaten your long-term security. Many retirees shift part of their SEP IRA into annuities for stable income.
Can I convert my SEP IRA to a Roth IRA?
Yes, but conversions are taxable. This strategy works well for retirees expecting higher taxes later or seeking tax-free legacy planning.
What is the safest thing to do with my SEP IRA after retirement?
Many retirees choose fixed annuities or MYGAs for guaranteed interest, principal protection, and predictable income.
Can I delay withdrawing from my SEP IRA?
You can delay withdrawals until RMD age, but delaying too long may cause larger taxable distributions later.
How do I compare annuity options for my SEP IRA rollover?
Review guarantees, income rates, contract terms, and insurer strength—starting with current fixed annuity rates.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
