Having Both a Simple IRA and a Roth IRA at the Same Time

By Felix Thorpe · Retirement Accounts WriterPublished October 8, 2026

Yes, you can hold both accounts, but your total contributions are limited

You can own a Simple IRA and a Roth IRA simultaneously. The IRS does not prohibit holding both. However, the contribution limits work together as a single annual ceiling, not as separate limits for each account. If you contribute $8,000 to a Simple IRA in a given year, you cannot then contribute an additional $7,000 to a Roth IRA that same year—your combined contributions across both accounts cannot exceed the Simple IRA limit for that year.

This matters most if you are self-employed or own a small business and have set up a Simple IRA, then later want to save additional money in a Roth IRA for its tax-free growth and withdrawal flexibility. The strategy is possible, but you need to understand how the math works before you open the second account.

Key Takeaways

You can own both a Simple IRA and a Roth IRA in the same year, but your total contributions to both accounts combined cannot exceed the Simple IRA annual limit.
The Simple IRA contribution limit is set by the IRS each year and applies to your total deposits across both account types.
If you contribute to a Simple IRA through your employer or business, any Roth IRA contribution that year must fit within the remaining room under the Simple IRA ceiling.
A Roth IRA conversion from your Simple IRA is possible but requires a two-year waiting period after you first establish the Simple IRA.

How the contribution limits stack together

The Simple IRA has an annual employee deferral limit set by the IRS. For 2024, that limit is $16,000 (this amount changes yearly). If you contribute $16,000 to your Simple IRA as an employee or self-employed person, you have used your entire allowance for that year. You cannot then deposit money into a Roth IRA.

If you contribute only $10,000 to your Simple IRA, you have $6,000 of room remaining under the $16,000 ceiling. You could then contribute up to $6,000 to a Roth IRA that same year. The two accounts share one annual limit; they do not each get their own separate limit.

Employer contributions to a Simple IRA (the matching or non-elective contributions your employer makes on your behalf) do not count toward your personal contribution limit. Only your own deferrals count. This distinction matters if you are trying to figure out how much room you have left for a Roth contribution.

When a Simple IRA and Roth IRA combination makes sense

The main reason to hold both is to access the Roth IRA's tax-free withdrawal rules and lack of required minimum distributions (RMDs). A Simple IRA requires you to begin taking distributions at age 73 (as of 2023, under current law). A Roth IRA has no RMD requirement during your lifetime, and withdrawals in retirement are tax-free if the account has been open at least five years.

If you have a Simple IRA through your business but want some retirement savings that grow tax-free and offer more flexibility in retirement, contributing to a Roth IRA alongside it can make sense—as long as your income does not exceed the Roth IRA income limits. Those limits vary by filing status and change annually, so you will need to check the current year's threshold before opening or funding a Roth account.

Another scenario: you may have left a previous job where you had a Simple IRA, and you now work for an employer who offers a 401(k). You could keep the old Simple IRA and also contribute to the 401(k), but the contribution limits would still combine. However, if you want to add a Roth IRA to the mix, the math becomes tighter and may not be practical.

The two-year waiting period for conversions

If you want to move money from your Simple IRA into a Roth IRA (a conversion), you must wait at least two years from the date you first established the Simple IRA. This is a specific IRS rule that applies only to Simple IRAs, not to other retirement accounts.

Once the two-year period has passed, you can convert any amount from your Simple IRA to a Roth IRA. You will owe income tax on the converted amount in the year of the conversion, but the money then grows tax-free in the Roth account. This strategy can be useful if you expect your tax bracket to be lower in the conversion year than it will be in retirement.

Income limits and Roth IRA may be able to access

Even if you have room under the Simple IRA contribution ceiling, you cannot contribute to a Roth IRA if your modified adjusted gross income (MAGI) exceeds the IRS limits for your filing status. These limits change annually. If you are single and your MAGI is above the threshold, you are not permitted to fund a Roth IRA directly, regardless of how much contribution room you have left.

If your income is too high for a direct Roth contribution, you have other options: a backdoor Roth conversion (contributing to a traditional IRA and immediately converting it to a Roth) or a mega backdoor Roth if your employer's 401(k) plan permits it. These strategies have their own rules and tax implications, so consulting a tax professional is wise if your income is near or above the Roth limits.

Tax filing and reporting both accounts

When you file your tax return, you will report contributions to both accounts. Your Simple IRA contributions reduce your taxable income (they are pre-tax). Your Roth IRA contributions do not reduce your taxable income in the year you make them, but they grow tax-free and withdrawals are tax-free in retirement.

If you take a distribution from either account before age 59½, you may owe a 10% early withdrawal penalty, with limited exceptions. The rules differ slightly between Simple IRAs (which have a one-year penalty-free rollover window) and Roth IRAs (which allow penalty-free withdrawal of contributions at any time). Keep track of which money is in which account so you understand the withdrawal rules that apply.

Frequently Asked Questions

If I max out my Simple IRA, can I still contribute to a Roth IRA?

No. If you contribute the full Simple IRA limit for the year, you have no remaining contribution room for a Roth IRA that same year. The two accounts share one annual ceiling. You could contribute to a Roth IRA in a different year when you contribute less to your Simple IRA.

Do employer contributions to my Simple IRA count toward the Roth IRA limit?

No. Only your own employee deferrals count toward the combined limit. Employer matching contributions or non-elective employer contributions do not reduce the amount you can contribute to a Roth IRA. You can calculate your Roth room based only on what you personally contributed to the Simple IRA.

Can I convert my entire Simple IRA to a Roth IRA right away?

Not immediately. You must wait at least two years from the date you established the Simple IRA before converting any funds to a Roth. After two years have passed, you can convert any amount. You will owe income tax on the conversion in that tax year.

What happens to my Roth IRA if I leave my job and lose my Simple IRA?

Your Roth IRA is separate from your employer's Simple IRA plan. If you leave your job, you can roll your Simple IRA into an IRA rollover account or another employer plan if available. Your Roth IRA remains yours and continues to grow regardless of your employment status.

Do I need to report both accounts on my tax return?

Yes. You will report Simple IRA contributions as pre-tax deferrals on your return. Roth IRA contributions are reported separately and do not reduce your taxable income. If you take distributions from either account, those are also reported. Your financial institution will send you forms documenting all activity.