A Savings Incentive Match Plan for Employees Individual Retirement Account, commonly known by the abbreviation "SIMPLE IRA", is a type of tax-deferred employer-provided retirement plan in the United States that allows employees to set aside money and invest it to grow for later use. Specifically, it is a type of Individual Retirement Account (IRA) that is set up as an employer-provided plan. It is an employer sponsored plan, like better-known plans such as the 401(k) (profit-sharing plans) and 403(b) (Tax Sheltered Annuity plans), but offers simpler and less costly administration rules. Like a 401(k) plan, the SIMPLE IRA is funded by a pretax salary reduction. Like other salary reduction contributions, these deductions are subject to social security, medicare, and Federal Unemployment Tax Act taxes. Contribution limits for SIMPLE plans are lower than for most other types of employer-provided retirement plans as compared to convention defined contribution plans like Section 402(g), 401(k), 401(a), and 403(b) plans.
| Year | Under Age 50 | Age 50 or Older |
|---|---|---|
| 2005 | $10,000 | $12,000 |
| 2006 | $10,000 | $12,500 |
| 2007 | $10,500 | $13,000 |
| 2008 | $10,500 | $13,000 |
| 2009 | $11,500 | $14,000 |
| 2010 | $11,500 | $14,000 |
| 2011 | $11,500 | $14,000 |
| 2012 | $11,500 | $14,000 |
| 2013 | $12,000 | $14,500 |
Read more about SIMPLE IRA: Rules, Early Withdrawal Penalty
Famous quotes containing the word simple:
“At present the globe goes with a shattered constitution in its orbit.... No doubt the simple powers of nature, properly directed by man, would make it healthy and a paradise; as the laws of man’s own constitution but wait to be obeyed, to restore him to health and happiness.”
—Henry David Thoreau (1817–1862)