Plans With IRAs

SIMPLE IRA

A Savings Incentive Match Plan for Employees (SIMPLE) IRA plan offers great advantages for businesses with 100 or fewer employees and no other retirement plans. It allows both the employer and employees to contribute to the plan.

Get information on establishing a SIMPLE IRA plan on IRS.gov or consult a benefit plan advisor. 

SIMPLE IRA Plans for
Small Businesses (.pdf file)

 

 

 
  • Can be established by any employer with 100 or fewer employees and no other retirement plans
  • Participant's retirement benefits based on participant’s account balance
  • Allows employees to contribute to their own retirement through salary deferrals, up to $11,5001 and an additional $2,5001 if age 50 or older
  • Requires the employer to make either matching contributions of up to 3% or a 2% contribution to all participants
  • Plan must cover all employees who have compensation of at least $5,000 in any 2 prior years and are expected to earn $5,000 in the current year
  • Easy to set up and operate
  • No annual return required
  • Annual nondiscrimination testing not required
  • Little design flexibility
  • Employees may not take loans from the plan
  • Employees may withdraw their balance at any time, subject to tax and withdrawals within the first 2 years may be subject to an additional 25% early distribution tax
  • Immediate vesting in full account balance
1Dollar limits are for 2012 and are subject to cost-of-living adjustments for future years.

SIMPLE IRA Plan Checklist to maintain your plan (.pdf file)

 

 

 

SIMPLE IRA Plan Fix-It Guide to correct your plan 

 

 

 

ADDITIONAL RESOURCES