SIMPLE IRA Plan

Definition

In general, a simple IRA is a retirement plan that may be established for businesses with up to 100 employees. The plan can also be utilized by self-employed individuals. The plan allows the employer a tax deduction for contributions made to it. The employer either makes matching or non-elective contributions to each eligible employee’s SIMPLE IRA, and employees may make salary deferral contributions.

Explanation

The employer has two alternatives when it comes to making contributions. First, the employer matches the amounts that each employee makes toward his or her own elective-deferral contribution up to 3% of the employee’s annual compensation. Second, the employer makes a flat 2% non-elective contribution to all qualified employees, regardless of whether the employee makes any contributions. Contributions to SIMPLE IRAs are immediately 100% vested.

Contact Our Retirement Specialists Today

Take the next step. Call our retirement specialists today at (214) 891-8131 to discuss the workplace savings plan that may be right for you and your business. You can also contact us via the form below.