Help! Rollover Simple IRA at Ascensus to new “Rollover IRA” at Fidelity
I have a simple IRA at Ascensus through a former employer which I left many years ago. Since I have other accounts at Fidelity I’d like to transfer the funds. Fidelity create what they call a Rollover IRA. But Ascensus options for transfer are:
- “Transfer to a Traditional IRA”
- “Transfer to a SIMPLE IRA”
- “Rollover to another eligible retirement account. For example, 401(k), 403(b), 457(b), money purchase, profit-sharing, and defined benefit plans.”
There is no option to transfer to a rollover IRA. So Im not sure what to do. And neither the Ascensus or Fidelity people have been helpful. I see online that a ‘Rollover IRA can be set up as a traditional IRA or a Roth IRA.” When I ask Fidelity what kind of IRA they set up for me to receive the funds – they stubbornly say: “it’s a rollover IRA, which is different from a simple or traditional IRA.” Frustrating.
Does anybody have any advice for me on this one?
Thank you!!
Permalink Submitted by Alan - IRA critic on Fri, 2025-05-16 21:54
Fidelity should have registered the new account as a traditional IRA, and it would be very easy for them to change it without creating a new account. If they refuse, because the account is a traditional IRA, select “transfer to a traditional IRA.
The term rollover is just an adjective that refers to the source of the rollover funds. A “rollover IRA” generally is limited to funds rolled from a qualified plan such as a 401k, not from another form of IRA.
Permalink Submitted by John Kline on Fri, 2025-05-16 22:34
Thank you! They (Fidelity) specifically advised me to set up this “Rollover IRA” to transfer funds from my existing simple IRA (Ascensus). But you are saying a “rollover IRA” is NOT intended to accept funds transferred from a Simple IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2025-05-16 23:55
The term “rollover IRA” is sort of a relic. Ascensus seems to be aware of that, but not Fidelity. Rollover IRAs used to be called “conduit IRAs” with the idea that the plan contained only money rolled from a qualified plan (401k, 403b). Prior to 2001 IRA money could only be rolled back to a qualified plan if it was held in a “rollover IRA”, but starting in 2001 qualified plans could accept rollovers from all IRAs types, not just rollover IRAs. After that, the benefit of having a “rollover IRA” declined except in a couple states that provide poor creditor protection for IRAs.
Note that a SIMPLE IRA is not a qualified plan, it’s a type of IRA but Fidelity seems bent on treating the SIMPLE IRA as if it was a qualified plan. If they will not change the title, it’s still OK to transfer the SIMPLE IRA to the Fidelity IRA, but it technically will not be a rollover IRA just by having that term in the registration.
It is surprising that Fidelity is resisting dropping the term “rollover” from the account, particularly because the “rollover” tag on the IRA is misleading when it’s funded from a SIMPLE IRA.