Simple IRA
What is a SIMPLE IRA?
The term SIMPLE stands for Saving Incentive Match Plan for Employees. A SIMPLE IRA (Individual Retirement Account) is a type of retirement plan that is provided by an eligible employer and allows an individual to keep money invested for later use. The money invested in a SIMPLE IRA has the opportunity to grow over time. Unlike an SEP IRA which is designed more for self employed individuals, a SIMPLE IRA is funded and sponsored by the individual's employer. An individual's SIMPLE IRA is able to gain money through a pretax salary reduction.
Which employers are eligible for a SIMPLE IRA?
Any employer of a company with fewer than 100 employees is eligible for a SIMPLE IRA. If an employer finds that over time the company expands to more than 100 employees, their previously established SIMPLE IRA is only eligible for two years after exceeding the 100 employee count.
Should I set up an SEP IRA or a SIMPLE IRA?
SEP IRA are a lot more beneficial for self employed individuals. A SIMPLE IRA allows the owner of a smaller-sized company to easily administer and add new employees to the retirement plan. It is always best to seek a qualified professional before committing to an IRA.
Where can I find useful information on SIMPLE IRA's and other types of Individual Retirement Accounts?
ShortTermRetirement.com is a website that is designed to help individuals with their retirement planning. Enter your name, e-mail address and phone number and you will receive information about retirement planning and how SIMPLE IRAs and other types of individual retirement accounts will benefit you in the future.
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