A SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Arrangement) is an employer-driven retirement tool for individuals in a company. This plan provides small business employers with a simplified method to contribute toward their employees' and their own retirement savings. Like individual traditional IRAs, employees can make contributions to the plan from pre-taxed compensation. Employers are required to make either matching contributions, which are based only on elective-deferral contributions made by employees, or non-elective contributions, which are paid to each eligible employee regardless of whether the employee made salary-reduction contributions to the plan. Because the responsibility of funding the SIMPLE IRA is shared between the employer and employee, employees have some degree of control over how much and when their SIMPLE IRAs may be funded. For a matching contribution, the employer's contribution may match the employee's elective-deferral contribution dollar for dollar, up to a maximum of 3% of the employee's compensation.
Contact any of our Sgroi Financial Advisors to determine how your SIMPLE IRA plan will contribute to a successful financial future.