It's never too early to start funding individual retirement accounts. IRAs are popular retirement vehicles that are available in a number of different types, each of which offers certain advantages and disadvantages. One of these is the Savings Incentive Match Plan for Employees, or SIMPLE IRA, used by some employers as a workplace benefit. If you have both a SIMPLE IRA and a traditional IRA, you can transfer the money from your SIMPLE IRA to your traditional IRA with no tax penalties. Depending on your preferences and your retirement goals, you can transfer either some or all of the money to your traditional IRA.
Visit the bank or investment firm that holds your SIMPLE IRA and let them know that you want to transfer the balance from it to a traditional IRA. They will likely check your ID to make sure that you can access the funds in the IRA and will also check the account to make sure that you won't be fined for transferring money out of it.
Fill out the transfer request form for the bank or firm. You'll need to include your personal information, the account number for your SIMPLE IRA and the account number for the traditional IRA you want to transfer the money to. If the traditional IRA is held at a different bank or investment firm, you will need to provide a routing number or other information about them as well. Ask someone at the bank or firm if you have any questions about the specifics of the transfer request form.
Give the transfer request form to a teller or other officer at the bank or firm. They will initiate the transfer, and the money will be deposited automatically into your traditional IRA. Depending on the bank or investment firm that holds your traditional IRA, the transfer process may require a few days before the money transfer is complete.
Let the bank or firm know that you want to close the SIMPLE IRA if you are transferring the full balance from it and don't plan on making any additional contributions to it. They will close the IRA or let you know what else must be done to close it. You don't have to inform the IRS of the IRA closure because its funds are still held in a retirement account and haven't been withdrawn.
Continue making contributions to your traditional IRA as normal, taking into account the amount you've added during the transfer so that you don't go over yearly contribution limits.
- Jupiterimages/Photos.com/Getty Images
- Traditional IRA vs. SEP
- How Does a Coverdell ESA Differ From a Traditional IRA?
- How to Convert a Roth IRA to a Traditional IRA and the Taxes
- IRA CD Vs. Traditional IRA
- Tax Liability on Traditional IRA Distribution
- Difference Between a Rollover IRA & a Traditional IRA
- How to Cash Out a Traditional IRA to Buy a House
- Can a Simple IRA Be Rolled Over Into a Traditional IRA?
- How to Transfer a Tax Sheltered Annuity 403(b) to a Traditional IRA
- Traditional IRA Distributions