IRA rollover into Simple IRA
Dear Alan et al,
I have a client who has participated in a Simple IRA plan for more than two years. Her plan allows her to pick her own brokerage firm so she is going to open a new account with us and transfer the proceeds. We would also like to consolidate a small Traditional IRA into this account.
In order to consolidate the IRA into the Simple, does the gaining Simple ACCOUNT have to be two years old or does the fact that she has participated in the Simple PLAN for more than two years suffice to meet the two year rule?
Here is what Pub 575 says, “After the first 2 years of participation in a SIMPLE retirement account, you may roll over amounts from a SIMPLE retirement account, a qualified retirement plan or an IRA into a SIMPLE retirement account.”
Thanks and Happy Thanksgiving,
Chris
Permalink Submitted by Alan - IRA critic on Tue, 2016-11-22 19:09
Chris, the two years is measured from the date of her first contribution to any SIMPLE IRA sponsored by this particular employer. The new SIMPLE IRA custodian should be provided some evidence of the start date for the 2 year period to enable them to capture that information in the event of a distribution before the new account itself has been held for 2 years.