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- Contributions are tax-deferred until withdrawn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.
*Representatives are registered, securities are sold, and investment advisory services are offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC
, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by SchoolsFirst FCU. CBSI is under contract with SchoolsFirst FCU, through the financial services program, to make securities available to Members.
CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty states of the United States of America.