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 The amount is excluded from your gross income, and the funds are taxed when they are withdrawn upon retirement.
An individual can open and make contributions to a SIMPLE IRA if the following requirements are met:
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:
If you answered 'yes' to all or most of these questions, a self-directed SIMPLE IRA may be a good choice for you.
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.