Thinking of replacing your SIMPLE IRA with a 401(k) in 2022? There are a few deadlines approaching to keep in mind to be able to make the switch.
Under IRS rules, a SIMPLE IRA must be the sole retirement plan in effect during the year and the deadlines for terminating a SIMPLE IRA in 2021 begin next month. If you miss either deadline (explained below), you will not be able to change your SIMPLE IRA to a 401(k) for another year. That means it’ll be 2023 before you could make the switch!
- November 2, 2021: to even be able to terminate a SIMPLE IRA, plan participants must first be notified that the termination is going to happen, 60 days prior. Missing the deadline of notifying plan participants means you won’t be able to switch to a 401(k) for 2021.
- December 31, 2021: to move away from a SIMPLE IRA for 2021, it must be terminated on this specific date – not before, and not after.
If you are unsure about switching and want to know your options, including the new PEP plans made possible by the CARES Act for businesses of any size in any industry, visit http://certified401k.com to learn about this new low cost, easy admin opportunity.