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:
“Here we are, we’re alone in the universe, there’s no God, it just seems that it all began by something as simple as sunlight striking on a piece of rock. And here we are. We’ve only got ourselves. Somehow, we’ve just got to make a go of it. We’ve only ourselves.”
—John Osborne (b. 1929)