SIMPLE IRA Plans
What is a SIMPLE-IRA?
A SIMPLE (Savings Incentive Match Plan for Employees) IRA is a retirement plan that allows employers and employees of small businesses to make tax-deferred contributions to the plan.
Who can participate?
Self-employed individuals, small-business owners, and any business with 100 or fewer employees that don't have another existing retirement plan.
Employer contribution limits
Option 1. 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).
Option 2. A contribution of 2% of each employee's compensation. The maximum compensation used to determine this contribution is $330,000 for 2023 and $345,000 for 2024. Contributions are tax-deductible and are required every year.
Employee contribution limits
Employees can contribute up to $16,000 for the 2024 tax year and $15,500 for the 2023 tax year ($19,500 for the 2024 tax year and $19,000 for the 2023 tax year for employees age 50 and older).