SIMPLE IRA Plan

Overview

Just keep things simple.

A SIMPLE IRA* is a powerful retirement plan option for businesses with 25 or fewer employees, providing many features of traditional retirement plans, but with lower costs and less paperwork.

SEFCU Wealth Management Services** offer SIMPLE IRAs to businesses that meet these three conditions:

You have 25 or fewer employees
Each employee received at least $5,000 in compensation for the preceding year and is reasonably expected to receive at least $5,000 during the current year
You do not offer any other retirement plan

Bag of money sitting next to an hourgalss

For businesses with 25 or fewer employees

Features & Benefits

Here’s How it Works

With just minimal paperwork, you set up Individual Retirement Accounts (IRAs) for each employee. Employees elect to contribute a portion of their salary, up to a certain amount, to the plan. As the employer, you either match contributions dollar for dollar (up to 3% of pay) or contribute 2% of pay for all eligible employees. You can participate as well: the only difference is that your voluntary contributions are based on a percentage of the business’s net earnings, rather than on compensation.

Once the plan is in place, participants reap these advantages:

Immediate vesting. Once funds are contributed, they belong to the employee.
Tax advantages. Employees contribute pre-tax dollars to the plan, which reduces their current tax bill. (Similarly, your matching contributions are excluded from your business’s taxable income, and you can reap other tax benefits as well.)