All SIMPLE IRAs operate on a calendar year basis. Replacing one with a safe harbor or traditional 401(k) plan takes some planning due to the following IRS rules:
A SIMPLE IRA must be the sole retirement plan in effect for the calendar year
SIMPLE IRAs can’t be terminated mid-year
For a SIMPLE IRA to be terminated at year-end, participants must be notified at least 60 days in advance (November 2)
Due to these rules, the soonest you can implement a new 401(k) plan is the January 1 following the year your SIMPLE IRA is terminated.
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