Simple IRA

Unlock a streamlined, cost-effective Simple IRA plan solution that’s tailor-made for small businesses with fewer than 100 employees.

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What is a Simple IRA?

A Simple IRA (Savings Incentive Match Plan for Employees) is an accessible and straightforward retirement plan designed for small businesses.

This retirement option encourages both employer and employee contributions, providing an excellent opportunity for businesses to offer valuable retirement benefits with ease.

Contribution Limits:

Employee Salary Deferrals: Employees can contribute up to $14,000 for 2023, and $16,000 for 2024, with a catch-up contribution of $3,500 for those 50 and older.
Employer Matching: Employers must match employee contributions, contributing either 2% of each eligible employee’s compensation or a dollar-for-dollar match of up to 3% of employee salary deferrals.
Flexible Contribution Choices: Employers can choose between the 2% non-elective contribution or the matching contribution method, providing flexibility in meeting retirement savings goals.

Eligibility:

Ideal for Small Businesses: Suitable for businesses with 100 or fewer employees.
Employee Requirements: Open to employees who have received at least $5,000 in compensation during any two prior calendar years and are expected to receive at least $5,000 in the current calendar year.
Immediate Enrollment: Employees can participate from the start of their employment.

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Simple IRA Options

Choose from any of the Simple IRA pre-designed matching and contribution schedules.

3% Employee Match

Dollar-for-dollar match of employee contributions up to 3% of each employee’s compensation (which can be reduced to as low as 1% in any 2 of 5 years).

2% Employee Contributions

A contribution of 2% of each employee’s compensation. The maximum compensation used to determine this contribution is $305,000 for 2022 and $330,000 for 2023. Contributions are tax-deductible and are required every year.

Additional Contributions

Beginning with tax year 2024, SECURE 2.0 allows an employer to make additional contributions to each employee of the plan in a uniform manner, provided that the contribution may not exceed the lesser of up to 10% of compensation or $5,000 (indexed for inflation).

Who Should Consider a Simple IRA.

Small Business Owners Seeking a User-Friendly Retirement Solution.

For small business owners looking for a retirement plan that’s easy to implement and manage, the Simple IRA is an excellent choice. With straightforward administrative requirements, it provides an accessible path to offering retirement benefits to employees.

Key Advantages:

Minimal administrative burden for employers.
Encourages employee participation in retirement savings.

Employers Looking to Attract and Retain Employees with Matching Contributions.

For businesses interested in offering a retirement plan that serves as a valuable employee benefit and a recruitment tool, the Simple IRA with its employer matching contributions is an appealing choice. It allows employers to attract and retain talented staff who appreciate the opportunity to grow their retirement savings with employer support.

Benefits to Employers:

Enhances employee recruitment and retention efforts.
Demonstrates a commitment to employee financial well-being, fostering a loyal and motivated workforce.