If you are an employer with, or considering, a SIMPLE IRA, Byrne Asset can be a helpful resource to you and your staff for investment management and free comprehensive financial planning. If you are an individual with SIMPLE IRA assets, you can contact us directly.
SIMPLE IRAs can be an appropriate plan for firms wishing to encourage employee retirement savings at low cost. Assets are held in separate accounts owned by each participant. Employees fund their accounts via payroll deductions they choose.
Employers must match employee contributions using one of two options. They can match employee deductions up to 3% of each employee’s compensation, or they can contribute 2% of compensation to all eligible participants regardless of employee contributions.
Advantages of SIMPLE IRAs include administrative ease, tax advantages for employees, and low costs for employers. Disadvantages include lower contribution limits than either SEP IRAs or 401k plans, and required minimum distributions which must begin at age 72, even if still employed.
Key attributes include:
Employee contributions (2024) – Optional, up to $16,000 through age 49, up to $19,500 if 50 or older.
Employer contributions – Required, either 2% of compensation or actual employee contributions up to 3% of compensation.
Maximum total contributions (2024) – Employee plus employer contributions cannot exceed $69,000.
Administration – Minimal.
We can help. Contact us anytime.