Simple IRA

Submitted by robert kort on Wed, 2017-11-08 16:13

I have a client who has a Simple IRA from a former employer. The Simple IRA is only about 13months old so I understand that it needs to remain as a Simple for 2 years before we could convert it to a traditional IRA. He also has a pension from a former employer that he would like to move into the IRA.

My question is can he contribute a lump sum pension into the Simple IRA or would I have open a traditional IRA to receive those funds?



Submitted by Alan - IRA critic on Wed, 2017-11-08 16:20

  • https://www.irs.gov/pub/irs-tege/rollover_chart.pdf
  • A rollover contribution cannot be made to a SIMPLE IRA until the 2 year waiting period is over. Therefore, client needs to open a TIRA now to receive the pension rollover. After the 2 year waiting period is over, client can then transfer the SIMPLE IRA balance into that TIRA as well.

 

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