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Simple IRA

Simple IRA

June 06, 2022
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Are you a small business owner? Do you want to help your employees prepare for retirement while realizing tax benefits in the process? You might want to consider starting a SIMPLE IRA.  A SIMPLE (Savings Incentive Match Plan for Employees) IRA is truly one of the simplest of all retirement savings accounts. It is an employer sponsored retirement plan offered by businesses with fewer than 100 employees. 

For the employer:

  • Compared to a 401(k), start-up & operating costs are significantly lower.
  • The plan is easy to create and manage.
  • Tax deductions are given to employers for their contributions.

For the employees:

  • Employee must have made at least $5000 in one of last 2 years and will earn that much in current year.
  • The option still exists to contribute to other IRAs. You can contribute to a SIMPLE IRA and still max out a traditional or Roth IRA as well.

You can either match employee contributions up to 3% of their pay OR you can do a “flat” non-elective contribution of 2% of their pay.  If you would like to talk about your options and the ‘why’ behind a SIMPLE IRA, please contact us today.