Combining SEP and SIMPLE IRAs
I have prospective client who is a self employed attorney. The only employees of his PLCC are himself and his wife. He and his wife both have older SEP accounts they no longer contribute to. They also have SIMPLE IRA accounts. Would there be any problem transferring the SEP accounts into their SIMPLE accounts? Also, the attorney has a 457 from a prior employer. Can he also consolidate the 457 into the SIMPLE as well? Thanks very much for your input!
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-16 00:51
No. The only accounts that can be transferred into a SIMPLE IRA are other SIMPLE IRA accounts. See the 3rd column of the IRS rollover chart here: http://www.irs.gov/pub/irs-tege/rollover_chart.pdf
Permalink Submitted by steve harper on Tue, 2015-06-16 16:15
Thank you! Can the SEP be transferred to a Traditional/ Rollover IRA?
Permalink Submitted by steve harper on Tue, 2015-06-16 16:20
I looked at the rollover chart and see that the SEP can be transferred. Thanks very much for your help!
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-16 17:08
For maximum consolidation, the SEP and old 457 (if a govt 457) can be rolled into a TIRA account or into one of the existing SEP IRA accounts. After 2 years from the date of the first SIMPLE contribution, the SIMPLE balance can be transferred into the other IRA as well. That would leave two accounts, with only a small balance from current contributions being in the SIMPLE IRA.
Permalink Submitted by steve harper on Tue, 2015-06-16 20:39
To make sure I understand the 2 year waiting period to move a SIMPLE plan would be from the date of the first contribution?Thanks so much for your sharing of expert knowledge. Very much appreciated!!
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-16 21:22
Yes, distributions or rollovers out of a SIMPLE IRA (except to another SIMPLE IRA) are not permitted until 2 years from the date of the first SIMPLE IRA Contribution.