Simple IRA vs SEP IRA (Max Contrbutions)

Submitted by Charlie Pesiridis on Mon, 2023-06-26 18:28

Good day: A client has three companies, each with its retirement plan type. Two Simple IRAs and one SEP IRA. Can the account holder make the maximum contributions for each plan? Best, CS



Submitted by Alan - IRA critic on Mon, 2023-06-26 19:36

The client, treated as single employer, must maintain only one type of plan, either a SIMPLE IRA or SEP IRA unless there are unique circumstances such as a recently acquired company. If the net earnings are low a SIMPLE IRA would probably allow higher contributions than the SEP, but a 401k would be higher than either. But this client may have current plan violations that need to be fixed soon.



Submitted by William Tuttle on Tue, 2023-06-27 04:46

  • As Alan pointed out all these companies are a Controlled Group and treated as a single employer for employer retirement plan purposes.
  • Also, as Alan pointed out there are one or more compliance errors.
  • A SIMPLE IRA must be the only employer retirement plan for the calendar year. Any SEP IRA contributions would be non-compliant.
  • If there are any non-owners/spouse employees. Anti-discrimination rules prevent the employer from disproportionately benefiting from contributions.
  • There is on one annual addition limit across all businesses.
  • The compliance errors must be resolved.


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