Savings Incentive Match Plan for Employees (SIMPLE) IRA
The SIMPLE IRA encourages employees to set aside tax-deferred funds for retirement. Designed for small businesses with fewer than 100 employees and for self-employed individuals, the SIMPLE IRA allows for both employee and employer contributions. It offers employees the opportunity to participate through salary reductions without the expenses associated with traditional employer-sponsored retirement plans.
SIMPLE IRA Features
- All employee and employer contributions are fully vested
- Contributions are tax-deferred until withdrawn
- Employer contributions are due by the employer's tax-filing deadline, including extensions
- Withdrawals are taxed as ordinary income*
Employee Eligibility Requirements
- No minimum participant requirement
- Must have received at least $5,000 in payment during preceding two years and will earn at least $5,000 during the current year
- Employee Contributions – Up to $8,000 or 100% of income, whichever is less. If age 50 or more, a catch-up contribution of $1,500 is allowed
- Employer Contributions – Either a non-elective annual contribution of 2% of an employee’s salary or a matching contribution of 3% each year
*Withdrawals before two years of participation are subject to an additional penalty of 25%, unless you are 59½ or older or meet other exceptions. After this two-year wait, the rules applicable to Traditional IRAs apply.
*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with SchoolsFirst Federal Credit Union to make securities available to members.
Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.
CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.