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What is a SIMPLE IRA?

A Savings Incentive Match Plan for Employees (or a SIMPLE IRA) is a retirement account that gives employers an easy way to make contributions toward their own retirement, as well as toward the retirement of employees. A SIMPLE IRA is designed for small businesses with 100 employees or less, as well as self-employed individuals.  If you are self-employed, you are considered both "employer" and "employee" under the terms of the plan.

A SIMPLE IRA is a salary-reduction plan. Employees can choose to make contributions up to the allowable limit and the employer must contribute to the plan. The employer can choose to match the employee’s contribution up to 3% of compensation (dollar for dollar), or choose to contribute 2% of compensation across the board with no matching.

A SIMPLE IRA is a tax-deferred plan, meaning contributions are made from pre-tax dollars. The amount is excluded from your gross income, and the funds are taxed when they are withdrawn upon retirement.


SIMPLE IRA Eligibility Requirements

An individual can open and make contributions to a SIMPLE IRA if the following requirements are met:   

  • You are self-employed, or own a business with less than 100 employees.
  • You do not sponsor any other retirement plan.


Self-Directed SIMPLE IRA Basics

A self-directed account is different than a standard account because it allows you to have more investment freedom.  By establishing a self-directed SIMPLE IRA, your retirement funds can be invested in the traditional stocks and bonds, as well as alternative investments like real estate, notes, precious metals, private placements, and more.

If you currently have a SIMPLE IRA that does not allow self-direction, you can easily transfer funds to an Entrust self-directed IRA and gain access to a wide range of additional assets.  Contact us today to get started. 


How to determine if an Entrust self-directed SIMPLE IRA is the right retirement plan for you:

  • Are you a small business owner looking for retirement saving options?
  • Are you looking for a plan with low start-up and administrative costs?
  • Are you looking for a plan that covers both you and your employees?
  • Do you want a plan that can help attract and retain quality employees while reducing business taxes?
  • Would you like flexibility in how much to contribute to the employees’ plans?


If you answered 'yes' to all or most of these questions, a self-directed SIMPLE IRA may be a good choice for you.

2015 SIMPLE IRA Contribution Limits

For 2015, the maximum contribution allowed to a Simple IRA is $12,500.  If you are over the age of 50, you may contribute an additional $3,000 for a total of $15,500.

Visit our Learning Center Resources to get up-to-date information on SIMPLE IRA contribution limits.

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