Rollover of SIMPLE IRA to Qualified Plan if over 59 1/2

[Guest lgm]

May a participant OVER 59 1/2 rollover the SIMPLE IRA balance to a qualified plan with out having to wait 2 years from participation in the SIMPLE IRA?

My interpretation is that you do not have a wait if you are over 59 1/2 because you are not subject to the increased penalty, but want to make sure I am understanding this correctly.

Thanks!

[wmyer]

You are correct. The 25% penalty only applies if the 10% penalty would otherwise have applied. The qualified plan has to accept rollovers from IRAs.

[rcline46]

I thought 408 specifically said you could NOT roll a Simple IRA to anything but another SIMPLE IRA.

[wmyer]

Indeed that used to be the case, but was changed by EGTRRA. Thus IRS Publication 590 (page 65) states:

After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan) or deferred compensation plan of a state or local government (section 457 plan).

[jevd]

If current pending legislation passes, it will be a moot point. The current Senate Pension Bill removes the 2 year period and the 25% penalty.

[Appleby]

So just to add…as it stands now, you must wait the two years before you rollover the assets to a qualified plan, as wmyer explained in his/her second post. Hi Wmyer, I think you answer a different question -than the one asked--in your first post?...Happens to em all the time when I get zealous