Simple IRA ROLLOVER TO Traditional IRA
I understand the two year rule for rolling over a Simple IRA to an IRA. My question would be rolling over subsequent contributions to the same plan. Does the original start date still apply, or does a new contribution start the two year clock again? Thanks very much.
Permalink Submitted by David Mertz on Mon, 2016-10-03 18:32
The clock starts with the first contribution deposited to the SIMPLE IRA account. Subsequent contributions do not affect the two-year clock.
Permalink Submitted by Brian Ditton on Tue, 2016-10-04 00:20
Thank you very much for your response. Just to be clear, contributions made to a simple IRA can be rolled to a traditional IRA, even if it has been less than two years so long as the original plan start date has surpassed the two year benchmark? Hopefully that is clear enough. Thanks very much. I appreciate your help.
Permalink Submitted by Alan - IRA critic on Tue, 2016-10-04 00:27
Yes, that is correct. If this SIMPLE uses a custodian designated by the employer there is also an option to transfer funds into a “transfer SIMPLE IRA” without fees or penalty before the 2 year waiting period is satisfied and the custodian is required to cooperate in such transfers. That operates as a form of control over excessive fees, but this can only be done if the SIMPLE Custodian was designated by the employer (Form 5305 SIMPLE).
Permalink Submitted by Brian Ditton on Tue, 2016-10-04 00:38
Thaks again for your expert advice. Much appreciated!