Frequently Asked Question
I have two jobs. Can I contribute to two SIMPLE IRA plans?
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)
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)
by
Denise Appleby
Denise Appleby is founder and owner of Appleby Retirement Consulting,which provides technical consultation, content, coaching, writing, editing and training services on related topics.
With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
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