A Savings Incentive Match Plan for Employees (SIMPLE IRA) allows individuals and small businesses with 100 or fewer employees to set aside money in tax-advantaged retirement accounts.
Key Advantages:
Is this retirement account right for you?
Salary deferral plan easily established with less administration
Electronic funding with customized contribution allocation for each participant
Can be paired with other retirement accounts
Eligibility:
Available to businesses with 100 or fewer employees and self-employed individuals
Includes sole proprietors, partnerships, C corporations, S corporations
Up to $14,000 in salary deferrals for 2022 and $15,500 in salary deferrals for 2023; with a $3,500 catch-up contribution if age 50 or older
2022 & 2023 Employer Contribution Limits:
2022 & 2023 Employer Contribution Limits:
The employer is generally required to match each employee’s salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee’s compensation. This requirement does not apply if the employer makes non-elective contributions instead.
Instead of matching contributions, an employer can choose to make non-elective contributions of 2% of each eligible employee’s compensation up to the annual limit of $305,000 for 2022; $330,000 for 2023. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.
Withdrawals:
Withdraw at any time but a 10% penalty may apply if you are under age 59 ½. If the withdrawal is taken within the first two years of participation in the plan that penalty increases to 25%.
Up to $14,000 in salary deferrals for 2022 and $15,500 in salary deferrals for 2023; with a $3,500 catch-up contribution if age 50 or older
2022 & 2023 Employer Contribution Limits:
2022 & 2023 Employer Contribution Limits:
The employer is generally required to match each employee’s salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee’s compensation. This requirement does not apply if the employer makes non-elective contributions instead.
Instead of matching contributions, an employer can choose to make non-elective contributions of 2% of each eligible employee’s compensation up to the annual limit of $305,000 for 2022; $330,000 for 2023. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.
Withdrawals:
Withdraw at any time but a 10% penalty may apply if you are under age 59 ½. If the withdrawal is taken within the first two years of participation in the plan that penalty increases to 25%.
