Savings Incentive Match Plan for Employees (SIMPLE) IRA
A SIMPLE IRA plan provides employers with under 100 employees to contribute towards their employees' and their own retirement. A SIMPLE IRA may be an easy and cost effective way for employers to set up a retirement plan.
Concept Applied
A SIMPLE IRA lets eligible workers accumulate retirement savings and defer all taxes until the money is withdrawn, similar to their traditional counterparts. SIMPLE IRAs provide the employee with instant, mandatory vesting contributions.
How It Works
Employees who received at least $5,000 in compensation from an employer during any two preceding calendar years (whether or not consecutive) and who are expected to receive at least $5,000 in compensation during the current calendar year are eligible to participate in the SIMPLE IRA plan for the calendar year.
Why Is It Useful?
SIMPLE IRAs have a much higher contribution limit than traditional IRAs. Similar to traditional IRAs, SIMPLE IRAs offer the opportunity for greater savings through pre-tax contributions while providing increased earnings through tax-deferred growth potential.
CHARACTERISTIC
SEP IRA
Tax Status
Tax-deferred
Who Contributes
Employer and/or Employees
Contribution Limit
$16,000 ($3,500 catch-up)
Employer Size Limits
100 or fewer employees
Office of James Rockwell & Zach Carothers
106 West Main Street, Suite 2,
Grangeville, ID 83530
(208) 983-3027