Simple IRA Plan and How It Works

Simple IRA Plan and How It Works


	The simple IRA plan is just that. Employees may contribute up to $6,000.00 before taxes. The employer is required to match dollar-for-dollar up to 3% of pay. The employer match is 100% vested (owned by the employee) from the inception. This type plan is suitable for employers that have less than 15 employees. Early withdrawals may be subject to a 15% penalty (25%, if withdrawal is made within the first two years).


Example of Contribution
	Salary is $50,000.00 Employee elects 10% to go to plan. $5,000.00 (Decrease gross pay) Company matches 3% $1,500.00 (Employer pays) Contributions are made under a qualified salary reduction arrangement. Forms are provided by our office for this trust account. The employee can elect to have a percentage of their salary set aside for this purpose and are not taxed until it is withdrawn from the SIMPLE IRA.
Contact Our Office to Discuss
	As with all advice, please contact our office to discuss if this is a viable solution for your particular situation. The simple cost of a one hour office visit could result in thousands of dollars of tax savings for you.