What plan fits my business?
What plan fits my business?
SIMPLE IRA
Have 100 or fewer employees and predictable cash flow? Take advantage of easy plan-administration, while offering potential tax advantages to your business and employees.
ContributionsFootnote 4
Contributions
SIMPLE IRA
Employer contributions are generally tax deductible by business. If this is a new retirement plan, you may also benefit from a tax credit of up to $5000 for the first 3 years. For the first 5 years, you may also benefit from an additional tax credit for making certain employer contributions, subject to certain limits and phase out over the 5-year period.
Plan expenses are generally tax deductible by business.
Employer contributions are flexible.
Employees can contribute.
A Roth (after-tax salary deferrals) option is not available. If made available under the Merrill SIMPLE IRA, employee contributions could be designated as Roth (after-tax) contributions at the election of the employee.
Loans are not available.
Withdrawals taken before age 59½ — with certain exceptions — are subject to an additional 10% early withdrawal tax (increased to 25% if withdrawn within the first 2 years of contributing to the plan).
Investment Choices
Investment Choices
SIMPLE IRA
You and your employees can access a full range of investment choices, including stocks, bonds, options, ETFs and well-known mutual funds.
Filing Requirements
Filing Requirements
SIMPLE IRA
No. IRS reporting is not required, but notification of employer contributions must be made to employees annually.
Contribution Limits
Contribution Limits
SIMPLE IRA
Under age 50
For employees under age 50, including business owners, the employees can defer up to $16,000 of salary in 2024. Businesses must contribute between 2% (minimum) to the lesser of 10% or $5000 (indexed for inflation) for each eligible employee regardless of participation to all eligible participants, or a dollar-for-dollar match of employee contributions up to 3% of compensation. If needed, the cap may be reduced as low as 1% for any 2 years during a 5-year period. Combined employee and employer contributions cannot exceed $32,000 in 2024.
50 or over
Employees age 50 and older, who are eligible to make catch-up contributions, including business owners, can defer up to $19,500 of salary in 2024. Businesses must contribute between 2% (minimum) to the lesser of 10% or $5000 (indexed for inflation) for each eligible employee regardless of participation to all eligible participants, or a dollar-for-dollar match of employee contributions up to 3% of compensation. If needed, the cap may be reduced as low as 1% for any 2 years during a 5-year period. Combined employee and employer contributions cannot exceed $39,000 in 2024.