Consolidation of SIMPLE/SEP/IRA
Is there any reason not to consolidate IRA’s for a retired individual?
I just met with a prospective client that has a large traditional IRA, then a smaller SEP & SIMPLE. He said that his Ed Jones guy AND his CPA have always told him not to consolidate them. I could understand if he had some sort of old fee arrangement on an account that he was grandfathered into, but I don’t understand why the CPA would say this. As far as I know, these are all pre-tax contributions.
Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2021-05-27 18:47
There is no reason not to combine them if retired and the accounts are no longer active. However, 2 years must have passed from the date of the first SIMPLE IRA contribution before the SIMPLE IRA balance can be transferred into a TIRA or Roth IRA, and it might be wise to keep them separate for a couple years after these accounts stopped receiving SEP or SIMPLE contributions in case of excess contribution issues.