Simple IRA

A SIMPLE IRA plan is a Savings Incentive Match Plan for Employees. Because this is a simplified plan, the administrative costs should be lower than for other more complex plans. Under a SIMPLE IRA plan, employees and employers make contributions to traditional Individual Retirement Accounts (IRAs) set up for employees (including self-employed individuals), subject to certain limits. It is ideally suited as a start-up retirement savings plan for small employers who do not currently sponsor a retirement plan.

Advantages:

• Easy to set up and run
• Administrative costs are low
• Employees can contribute, on a tax-deferred basis, through convenient payroll deductions
• You can choose either to match the employee contributions of those who decide to participate or to contribute a fixed percentage of all eligible employees’ pay

Under a SIMPLE IRA plan, you, the employer, make contributions to traditional IRAs (SIMPLE IRAs) set up for each of your eligible employees. In addition, this type of plan allows your employees to defer a part of their salaries into the plan for retirement. A SIMPLE IRA Plan is funded both by employer and employee contributions. Each employee is always 100% vested in (or, has ownership of) all money in his or her SIMPLE IRA.

Click here to watch a short video about SIMPLE and SEP IRA's

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Please Note: Plan distributions may be subject to tax and 10% penalty if withdrawn before age 59 1/2.  Loans are subject to interest charges and possible fees.  This will reduce the retirement benefit if not paid. 

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