I have two jobs. Can I contribute to two SIMPLE IRA plans?

By Denise Appleby AAA
A:

If there is no relationship between the two companies - the only link is that the employee works for both of them - then the employee can make salary deferral contributions up to an aggregate amount of $20,500, with no more than $13,000 to one of the SIMPLE IRAs.

The maximum aggregate contribution for an individual who reaches age 50 by the end of the year is $20,500. SIMPLE IRAs are subject to limitations established under IRC§ 402(g), which limits salary deferral contributions to $15,500 for 2007. Therefore, an individual who participates in multiple retirement plans can defer no more than $15,500 for 2007 (regardless of the number of plans in which he or she participates) plus catch-up contributions of $5,000.

On the other hand, if the two companies are affiliated or related in any way - if there is any one party that has ownership of both companies, whether in part or 100% ownership - or if there is any relationship that would constitute an affiliated service group, then the maximum amount that the individual can defer to both SIMPLEs may be limited to $13,000.

To learn more, check out the SIMPLE IRA tutorial.

This question was answered by Denise Appleby (Contact Denise)

RELATED FAQS

  1. Can I purchase mutual funds for my IRA?

    Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
  2. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
  3. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
  4. What's the difference between a financial advisor and a financial planner?

    Seeking professional advice from a financial advisor may involve asking for financial help from a certified financial planner, ...
RELATED TERMS
  1. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Gold IRA

    Definition of Gold IRA
  4. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  5. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. You need to be patient, diligent and perseverant to be successful at investing, but more importantly, you need to start early.
    Investing Basics

    Why You Should Start Investing Early? ...

  2. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  3. Retirement

    Planning Ahead for 2015's Tax Law Changes

  4. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

  5. Retirement

    5 Crucial Tips For Your Retirement Income ...

Trading Center