How to Transfer a Simple IRA to Traditional

Both SIMPLE IRAs and traditional IRAs offer tax benefits.

SIMPLE stands for Savings Incentive Match Plan for Employees. This is a type of individual retirement account (IRA) that allows contributions from employers as well as the employee. A SIMPLE IRA is a tax-deferred IRA, like a traditional IRA. You may want to transfer funds from a SIMPLE IRA to a traditional IRA to consolidate your retirement accounts or to seek lower account fees. Your employer cannot stop you from moving money out of your SIMPLE IRA.

Things You'll Need

• Transfer forms

Instructions

1. Figure the age of your SIMPLE IRA account by checking the date the first contribution was made. If the account is less than two years old, the account is not eligible to be transferred into a traditional IRA.

2. Look up the account number and institution information of the traditional IRA that you want to transfer the money into.

3. Complete the transfer request form from the financial institution that holds your SIMPLE IRA. The forms may differ slightly among different institutions, but you will always be required to submit your personal information including your Social Security number and the account information of both your SIMPLE IRA and the traditional IRA you are transferring the money to. Once you have submitted the paperwork, you are finished, because the money will automatically be moved from the SIMPLE IRA to the traditional IRA and you will not have any tax consequences.

References

• IRS: SIMPLE IRA Plan
• IRS: Retirement Plans FAQs regarding SIMPLE IRA Plans
• Motley Fool: Rollovers vs. Transfers Part I