How to Contribute to Both a Traditional IRA & a SIMPLE IRA
- 1). Participate in your employer's SIMPLE plan. Enroll by contacting your company's human resources department or your supervisor. Contributions are by payroll deduction. Generally, your employer will match a portion of your contributions.
- 2). Determine your annual income. Your ability to make tax-deductible contributions to a traditional IRA as well as a SIMPLE IRA depends on your W-2 income from all sources. Since you are covered by a retirement plan at work, your annual tax-deductible contribution limits are lower than if you had no SIMPLE plan at work. See the tables in IRS Publication 590 for eligibility.
- 3). Open a traditional IRA account. You can do this at a bank, brokerage firm or other financial institution. You can open up more than one IRA account, as long as your total contributions do not exceed your overall IRA limit -- typically $5,000 per year, but the amount can vary based on your income.
- 4). Make your contribution to your traditional IRA by giving a check or wiring money to the IRA custodian you selected.
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