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SIMPLE IRA Plan


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My understanding is that SIMPLE IRA funds can't be rolled into a 401k SH plan after SIMPLE is 2 yrs old.

Can a SH 401k plan be started mid year as a new plan and terminate SIMPLE IRA (contributions have been made to SIMPLE this year) or does 97-9 require that everything starts first day of the calendar year following amendment to terminate SIMPLE.

I appreciate all input.

Thanks

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Guest bmurphy

TAG,

I believe that, beginning this year, you can roll a SIMPLE-IRA into a Safe Harbor 401k. I don't believe there is a 2-year participation limit in the SIMPLE as applies to rollovers to IRA's.

You cannot maintain a SIMPLE in the same calendar year as another qualified plan so you'd need to term the SIMPLE this year & start the SH k-plan next year.

Brian

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Bmurphy, thanks for your reply. Didn't notice the rollover rule for Simple IRA to SH401k changed in '02. Cool!

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The two-year period applies to any SIMPLE IRA transaction that involves moving the SIMPLE IRA assets to another retirement plan that is not a SIMPLE IRA.

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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