My last job had a 401K, my new job has a simple IRA. Can the $ just be transfered over? What are the differences between these two accounts?

November 14, 2007

Posted by LowellsInvests

( 2 ratings )

The differences are a factor to the employer who finds a plan to best meet with business resources. As an employee the differences are not as impactful. I'm guessing you moved to a smaller company, am I right?

The SIMPLE-IRA Plan makes it easier for small businesses to offer a tax-advantaged, company-sponsored retirement plan. The SIMPLE plan is a flexible, easy to administer retirement plan for businesses with 100 or fewer employees. SIMPLE plans are funded by employer contributions and can be funded by elective employee salary deferrals.

Employees can make tax deductible contributions of up to $10,000 ($12,000 for participants age 50 or older) per tax year. Employers match the contribution. The money isn't taxed until withdrawn.

A SIMPLE plan can be maintained by an employer that meets the two (2) following qualifications:

1. In the previous calendar year - Have no more than 100 employees who earned a total compensation of $5,000 or more
2. does not maintain any other retirement plan.

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