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Savings Incentive Match Plan For Employees Of Small Employers (SIMPLE)

What is 'Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE'

A retirement plan that may be established by employers, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SIMPLE. The employer makes either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions.

Explaining 'Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE'

The employer has two alternatives when it comes to making contributions. The first is to match the amounts that each employee makes toward his or her own elective-deferral contribution up to 3% of the employee's annual compensation. The second alternative is for the employer to make a flat 2% nonelective contribution to all qualified employees, regardless of whether the employee makes any contributions.


Further Reading


Household saving behavior: The role of financial literacy, information, and financial education programs
www.nber.org [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Financial illiteracy, education and retirement savingFinancial illiteracy, education and retirement saving
books.google.com [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

SIMPLE Retirement PlansSIMPLE Retirement Plans
www.questia.com [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Financial literacy and retirement preparedness: Evidence and implications for financial educationFinancial literacy and retirement preparedness: Evidence and implications for financial education
link.springer.com [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Why Not a'Super Simple'Saving Plan for the United States?Why Not a'Super Simple'Saving Plan for the United States?
papers.ssrn.com [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Heuristics and biases in retirement savings behaviorHeuristics and biases in retirement savings behavior
www.aeaweb.org [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Lessons from behavioral finance for retirement plan designLessons from behavioral finance for retirement plan design
books.google.com [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Financial literacy: an essential tool for informed consumer choice?Financial literacy: an essential tool for informed consumer choice?
www.nber.org [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …

Household saving behavior: the role of literacy, information and financial education programsHousehold saving behavior: the role of literacy, information and financial education programs
www.econstor.eu [PDF]
… may also have an incentive to spend time and effort in planning, since they may benefit … to promote Individual Development Accounts (IDAs), which are subsidized savings accounts … According to most theoretical models of saving, the optimal saving rate depends on a long list of …



Q&A About Savings Incentive Match Plan For Employees Of Small Employers (SIMPLE)


What is the name of this retirement plan?

Savings Incentive Match Plan For Employees Of Small Employers (SIMPLE).

Who can establish a SIMPLE IRA?

An employer, including self-employed individuals.

What does "annual compensation" mean in this context?

Annual compensation refers to wages earned by an individual during one year from employment with an employer. This includes commissions, bonuses and other forms of pay that are considered taxable income under federal tax law."

How much can an employer contribute to a SIMPLE IRA?

The employer may make either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions.

What are the two alternatives for employers when it comes to making contributions?

The first is to match the amounts that each employee makes toward his or her own elective-deferral contribution up to 3 of the employee's annual compensation. The second alternative is for the employer to make a flat 2 nonelective contribution to all qualified employees, regardless of whether the employee makes any contributions.