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Simple IRAThe Simple IRA, or the savings incentive match plan for employee’s individual retirement account, is an employer-sponsored retirement strategy implemented by companies in the United States to promulgate the prolonged welfare of current employees until and into their retirement years. For companies, the advantages of utilizing a Simple IRA plan, over more tradition 401(k) or 403(b) retirement plans, is the significantly less expensive and rigorous administrative rules of the Simple IRA. For individual employees, the benefits of a Simple IRA are found in the pretax salary reduction. Though the salaries of persons entertaining this form of retirement plan should prove aware that Simple IRA contributions are subject to Medicare, FUTA, and Social Security taxation, the benefits truly do accrue over time. A financial planner is best suited to aid workers in assessing the best route for saving for retirement, and a Simple IRA could be one of these options.
Are you or someone you faced with a Simple IRA and have questions? Contact one of our expert financial planners today and get the answers you need to make an informed decision about your Simple IRA!
There are strict contribution limits for persons utilizing a Simple IRA, and for the most part, the contribution limits prove relatively lower than most other versions of company-sponsored retirement strategies.
The 2008 Simple IRA contribution guidelines for contribution mandates include:
- Standard limitations- $10,500
- Catch-up limitations for persons over the age of 50- $13,000
The Simple IRA also contains certain eligibility restrictions for employers, which regulate the number of employees a company can employee to prove eligible for Simple IRA benefits. Companies with less than one-hundred employees earning five-thousand dollars or more in the past year are eligible for Simple IRA retirement benefits programs. There is a two-year grace period for companies that breach the one-hundred employees limit for their Simple IRA benefits program.
Are you or someone you faced with a Simple IRA and have questions? Contact one of our expert financial planners today and get the answers you need to make an informed decision about your Simple IRA!
Read more on other financial topics such as: Estate Planning, Tax Planning and Certified Financial Planner
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