Regulations

Mid-Year Switch from SIMPLE IRA to Safe Harbor 401(k) Plan NOT to a Self-Directed Solo 401k

February 3, 2024 | By Mark Nolan

The SECURE Act of 2022 (SECURE 2.0) now allows for a mid-year change of a SIMPLE IRA to a safe harbor 401k. This provision is effective for 2024 and going forward. Prior to the update in the rules, the change from a SIMPLE IRA to a 401k could only take place the next calendar year.

 The replacement plan can be either a traditional safe harbor plan or a Qualified Automatic Contribution Arrangement (QACA) safe harbor 401(k) plan. However, this new rule does not apply to self-directed solo 401k plans because by law a solo 401k does not have the safe harbor feature since it is for owner-only businesses with no full-time employees.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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