Originally Published on 3/7/24by Prof. Robert Bloink and Prof. William H. Byrnes Small business clients often choose a retirement plan based on conditions that exist in the early stages of the business’ existence. Starting a business can be time-consuming and stressful, which often means that ease of administration and lower costs become a deciding factor for business owners who adopt retirement plans when a business is young. While choices made by these small business owners may initially fit, conditions change over the life of a business. Business owners who adopted SIMPLE IRAs may later find that switching to a safe harbor 401(k) can have many benefits—especially when they’re trying to attract employees who have become accustomed to the standard 401(k) savings option. Fortunately, the SECURE Act 2.0 has now made it easier to make the switch starting in 2024. That means many business clients may have new questions about the differences between SIMPLE IRAs and safe harbor 401(k)s, as well as the technical rules for transitioning from a SIMPLE plan to a 401(k). Making the Switch from SIMPLE-to-Safe Harbor Post-SECURE 2.0 Prior to the SECURE Act 2.0, business owners couldn’t change from a SIMPLE IRA to a 401(k) before the end of the year. By November 2, the employer was required to provide notice of the switch to employees. The formal termination date was always December 31, and the 401(k) start date was January 1.