Is there now a Roth SIMPLE IRA?
The 2022 SECURE Act created the Roth SIMPLE IRA and Roth SEP IRA from what I understand.
However, I am unable to find a custodian that offers either, and the IRS website still says “A SIMPLE IRA cannot be a Roth IRA” on the IRS website: https://www.irs.gov/retirement-plans/plan-sponsor/simple-ira-plan#:~:text=A%20SIMPLE%20IRA%20cannot%20be,credit%20unions%20and%20brokerage%20firms
IRS Publication 560 for 2022 also says “A SEP-IRA can’t be a Roth IRA” and “A SIMPLE IRA can’t be a Roth IRA”.
2 questions.
1. Is there a Roth SIMPLE IRA and Roth SEP IRA or not?
2. Do you know of any custodians that will open such an account?
Permalink Submitted by Alan - IRA critic on Thu, 2023-09-07 14:15
No. The IRS will have to issue guidance before a custodian can open these Roth accounts. And as we have seen from the original Secure Act, this can take years. Meanwhile, a SEP owner can simply convert SEP contributions to a Roth IRA with no waiting period, but a problem is created if the SEP contribution includes excess amounts. With a SIMPLE IRA, the conversion cannot be done until the 2 year waiting period is completed.