A SIMPLE IRA is an employer-sponsored plan for businesses with 100 or fewer employees. Contributions come from both employee salary reductions and employer non-elective or matching contributions (similar to those found in a 401(k) plan).
|Employee Elective Deferrals||$12,500||$13,000|
|Catch-Up Elective Deferral Contribution Age 50+||$3,000*||$3,000*|
|Your employer can elect from two different contribution methods. Check with your employer which option they have chosen. Employer contributions are in addition to your elective deferrals.|
SIMPLE IRA plans impose less administrative burdens on employers because unlike other employer-sponsored plans like a 401(k), SIMPLE plans are not subject to discrimination tests. They are also flexible in that contributions may come from both the employee and employer.