The SIMPLE IRA
The SIMPLE IRA is a low-cost retirement plan suited for small employers who want to help their employees plan for retirement through shared contributions.
A Savings Incentive Match Plan for Employees (SIMPLE) IRA is an IRA-based plan that gives small employers an easy way to make contributions toward their employees’ retirement by either matching employees’ contributions or making non-elective contributions to all employees.
- Higher employee retention as the plan allows employees to accumulate assets for their retirement.
- The startup and maintenance costs are very low compared to qualified plans.
- Available to business entities, including self-employed persons, partnerships and corporations, as well as certain tax-exempt organizations
- Both employee and employer contributions are tax deductible
- Earnings inside the account are tax deferred until withdrawal because the contributions are made to an IRA.
For 2020, the maximum amount employees may defer is limited to $13,500. Participants who are 50 and older may make additional “catch-up” contributions of up to $3,000. (Here is a detailed spreadsheet of contribution limits.)
The team at Craig Wealth Advisors will meet with each employee on a yearly basis to review their account and make any recommendations. We will meet each new employee and help them complete the paperwork necessary to get them started in the SIMPLE IRA plan. Our promise is to make this process simple so all employees can start building their financial future