Starting in 2024, a SIMPLE IRA can be replaced with a safe harbor 401(k) plan mid-year.
Good day: For Starting in 2024, a SIMPLE IRA can be replaced with a safe harbor 401(k) plan mid-year.? Are there listed provisions that specify requirements, such as pro-rate amounts or others? Best, CS
Permalink Submitted by Alan - IRA critic on Fri, 2023-11-17 17:19
Yes, Sec 332 of Secure 2.0 states that the combined deferral limit is pro rated for the number of days the SIMPLE IRA is maintained using the SIMPLE limit plus the number of days the 401k is maintained using the elective deferral limit. For example, if the safe harbor 401k was adopted 7/1, the total limit would be the average of the SIMPLE and 401k limits. Further, for the rollover to the 401k, the 2 year holding requirement for SIMPLE IRA distributions is waived.