Combining Simple, SEP, and TIRA… Which to which?

Submitted by Joe Harris on Tue, 2020-10-27 11:47

I have a Simple, a SEP, and a TIRA, which are housed with the same brokerage. I’d like to simplify by combining them all into one (if reasonable). What are the pros and cons between moving Simple and SEP to TIRA, OR Simple and TIRA to SEP, OR SEP and TIRA to Simple? I’m self-employed with only my family as employees; so control all payroll and plan options. I’m sure I’m leaving out pertinent details, but I’m a manufacturer, not a financial planner. I thank you in advance for your time and attention.



Submitted by Alan - IRA critic on Tue, 2020-10-27 17:01

Which type of IRA are you currently using for your SE plan contributions? Even if the SIMPLE IRA is not an “on going” SIMPLE IRA, you cannot transfer funds out of it for at least 2 years after your first contribution. 

Submitted by Joe Harris on Wed, 2020-10-28 18:31

We’re currently adding to the Simple, but all of the plans have existed for years past any rules which would preclude actions. Since you’re asking about the Simple, does that mean that should be the consolidation target? Thanks for your time.

Submitted by Alan - IRA critic on Wed, 2020-10-28 19:16

No, since the SIMPLE IRA is on going (contributions are being made), it must stay separate. But you can combined the SEP and the TIRA. The best way to do that is by a direct trustee transfer of the SEP IRA balance into the TIRA. I assume the SEP IRA is left over from past employment in a company with a SEP IRA, or your past adoption of a SEP IRA for your self employment earnings. If the SEP is not being used anymore it can be transferred as above, but if it is you should keep it open. Incidentally, you cannot maintain any other IRA for your business if you have an active SIMPLE IRA account.

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