401k to SIMPLE IRA in same calendar year
I’ve found it’s generally not acceptable to switch from a 401k to a SIMPLE IRA in the same calendar year according to IRS Notice 98-4; however, would it be acceptable to establish the SIMPLE IRA in the same year but not start contributions until January 1 of the following year?
Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2017-06-21 16:57
Yes, that would be acceptable.
Permalink Submitted by Sandra Eilers on Wed, 2017-06-28 19:14
We have a topic of a 401k rolled over into a Simple IRA on 1/1/17 and now asking if it can roll back into a different 401(k) this year. Any insight into that situation?
Permalink Submitted by Alan - IRA critic on Wed, 2017-06-28 19:43
That should not be a problem since the SIMPLE IRA could not have accepted the 401k rollover until the 2 year waiting period had been completed. Since the 2 year period has been completed, the employee can roll the SIMPLE IRA balance or any portion of it out of the SIMPLE whenever they choose.