AboutDavid M Iannopollo Expertise I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances.
Experience I have over 20 years experience in the business and financial world.
Question I know this may seem backward but... I am self employed with a SEP account valued at about $75K. The last year has been terrible financially in so many ways for me-earnings down, investments down, loss of social security income, loss of PT job I had just for benefits-insurance. I must get some debt relief so I can qualify to refin my house. I have a balloon coming 2/10. I am thinking of borrowing against my retirement but I don't think I can borrow against my SEP. Can I roll my SEP into a simple 401K-so I can then take a loan against that money. I know the retirement account loan is a bad idea but I need a bridge until I can get my home sold ($125K plus in equity).
Answer Hi Julia,
You are correct that you cannot borrow from your SEP. You can rollover your SEP to a solo 401k (not a SIMPLE) and take a loan from there if you wish. While it's not generally a good idea to take a loan from a retirement account sometimes there may be no other options. When you do sell your home, you may want to consider putting the equity into a high cash value life insurance policy. Besides being a great conservative addition to your portfolio, it would allow you tax free access to your money to avert situations such as you are in now. I hope this helps. Best of luck!
