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July 2, 2009

Can I terminate my SIMPLE IRA Plan in mid-year?

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Can I terminate my SIMPLE IRA Plan in mid-year?

Times are tough and I can no longer afford to make http://retirementdictionary.com/definitions/258/contribution contributions to my employees http://retirementdictionary.com/definitions/simpleira SIMPLE IRAs. Can I terminate the Plan during the middle of the year?

Unfortunately, you cannot terminate your SIMPLE IRA Plan or choose to suspend contributions in the middle of the year, regardless of the financial status of your business. According to the IRS, SIMPLE IRAs cannot be maintained for less than a full calendar year, except in cases where a new SIMPLE IRA is established after the beginning of the year. As such, you must make the contributions which were promised to your employees when you provided them with the notification. For information about this notification requirement, see our http://retirementdictionary.com/tutorials/tutorialsimple-ira-notification-and-administrative-requirements Tutorial: SIMPLE IRA Notification and Administrative Requirements.

For more on SIMPLE IRAs, see our http://retirementdictionary.com/categories/Simple-IRAs/tutoria SIMPLE IRA Tutorial

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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