Questions and Answers

An individual may transfer his/her Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA to a traditional IRA after two years from the initial contribution date. A simplified employee pension (SEP) IRA is a traditional IRA that accepts SEP contributions, so a transfer of those assets to a traditional IRA is always possible. Therefore, after the individual meets the two-year requirement for the SIMPLE IRA, he/she may combine a SIMPLE IRA and a SEP IRA into one traditional IRA. If SIMPLE contributions continue however, a SIMPLE IRA must exist to accept them. If SEP contributions continue, financial organization policy may require a separate IRA to ensure correct reporting.