What is a SIMPLE IRA?

A Savings Incentive Match Plan (also known as a SIMPLE IRA) is a retirement plan for small businesses with 100 or fewer employees who earned $5,000 or more in compensation in the last year. A SIMPLE IRA gives small business owners a convenient way to contribute to their employees’ — and their own — retirement.

Employees can contribute to a SIMPLE IRA through salary deferrals and also receive employer contributions. A SIMPLE IRA can help you and your employees contribute to retirement savings while reducing your taxable income.

The advantages of a SIMPLE IRA

SIMPLE IRAs have a number of advantages over other retirement plans, including:

Who can contribute to a SIMPLE IRA

Anyone who:

How contributions are made to a SIMPLE IRA

Contributions can be made by the employee (up to $12,000 per year for tax year 2014) and by the employer. Employers can choose:

In addition:

Learn More


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