Simple IRA

A tax-deferred retirement plan that allows pre-tax employee contributions with additional employer contributions for small businesses with 100 or fewer employees.

Account Details

Features and Benefits

  • Business and personal tax savings for employer with employer contributions are deductible as a business expense and not required every year. The employer may increase, decrease, or skip annual contributions as necessary.
  • An easy to set up and maintain retirement plan.
  • Both the employer and their employees make contributions to the plan.

Annual Contribution Limits

  • Maximum employee contribution of $12,500 if under age 50.
  • Additional $3,000 allowed if employee is age 50 or older at the end of the calendar year.
  • Employers can either match employee’s contribution dollar for dollar up to 3% of employee’s salary or contribute 2% of salary to each eligible employee even if employee doesn’t contribute.

Eligibility

  • Small business owner and their employees.
  • Any employee expected to earn at least $5,000 this year, and who earned at least $5,000 in the two immediately preceding years.

Deadlines

  • Simple IRAs must be established by October 1 of the tax year to which the qualifying contribution(s) will apply.
 

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