The rules for SIMPLE IRAs state that employees who participate in this type of 澳洲幸运5官方开奖结果体彩网:tax-deferred retirement account may not transfer funds to another retirement plan for two years after opening a SIMPLE account.

What does this mean, though, if you leave the company within two years, but your new employer does not offer a SIMPLE IRA? Here's a look at how SIMPLE IRAs work and what you can do if you find yourself in this situation.

Rules Governing SIMPLE IRAs

A SIMPLE IRA is a tax-deferred retirement plan for businesses that have 100 or fewer employees. An employer sets up the plan with a financial institution, which then administers it. The paperwork is minimal—just an initial plan document and annual disclosures to employees. Startup and maintenance costs are low, and employers get a 澳洲幸运5官方开奖结果体彩网:tax deduction for contributions they m🌃ake to employees' accou🔯nts.

To participate in a SIMPLE IRA, employe✤es typically must have earned at least $5,000 in compensation in any two previous calendar years and be expected to earn at least $5,000 in the current year. Employers can choose less restrictive participation requꦑirements if they wish. An employer may also choose to exclude from participation employees who receive benefits through a union.

To open an account, the employee must fill out a SIMPLE IRA adoption agreement. Once the plan is established, employers are generally required to match each employee's contribution up to 3% of their pay. Or, instead of matching contributions, the employer can contribute 2% of pay for each employee.

If You Leave During the 2-Year Waiting Period

During the first two years of opening a SIMPLE IRA account, you may not transfer those assets into another retirement plan. This two-year period begins on the first day that your employer deposits a contribution to the SIMPLE account. Any 澳洲幸运5官方开奖结果体彩网:distributions 🍸that you do take from a SIMPLE IRA during this two-year period are subject to an early-distribution penalty of 25% if you are younger than age 59½ at the time of the w🉐ithdrawal.

There's one exception. The two-year waiting period does not apply to transfers or 澳洲幸运5官方开奖结果体彩网:rollovers between two SIMPLE IRAs. So if you are no longer with the company that sponsored the SIMPLE IRA, you can either leave the assets where they are until the two-year waiting period is over, or you may roll over the assets to a SIMPLE at another financial institution.

After the 2-Year Period

When two years have elapsed, you may move your SIMPLE IRA to another eligible retirement plan by means of a transfer, rollover (including a direct rollover), or Roth conversion, whether or not you've remained with the company that sponsored the SIMPLE.

To accomplish the transfer, you would need to submit a SIMPLE IRA 澳洲幸运5官方开奖结果体彩网:adoption agreement along with a copy of the Form 5304-SIMPLE or Form 5305-SIMPLE that the employer filled out to establish the SIMPLE IRA. The transfer can happen once the new account has been established.

The Bottom Line

If you part ways with your employer and you're wondering what to do with your SIMPLE IRA, you have a few options. You can leave it where it is, at its current financial institution. You can roll it over to another SIMPLE IRA before two years have elapsed with no penalty. Or you can wait two years after the account was opened, and then move the funds to another account via a rollover or Roth conversion.