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Simple retirement plans – SIMPLE IRA

Simple retirement plans – SIMPLE IRA

There are a lot of people who started their journey from a startup and have now become business owners. There are many who own small but established businesses. These businesses are what they are today because of the hard work put in by all the employees, so the owner must have a sense of responsibility towards them.

Securing a good and anxiety-free retired life is very important, irrespective of the individual being the employer or the employee. Nowadays, we have simple retirement plans, also known as SIMPLE IRA, which are ideal for companies with a workforce of 100 employees or less.

According to US laws, an individual can have more than one retirement plan. But if the employer opts for a simple retirement plan, then they cannot maintain any other retirement plan.

A simple retirement plan or SIMPLE IRA (individual retirement account) is quite similar to the 401(k) plan, but requires much cheaper maintenance.

It works both ways for both the employer and the employee. The employer contributes to his employees’ retirement savings as well as his own. It doesn’t require much administration, as the employees are given an option where they can reduce some amount of their income and contribute it to their retirement savings plan, whereas the employer also has to make either a matching or a non-elective contribution. So in this case, both the employer and the employee contribute to the plan.

The simple retirement plan or the SIMPLE IRA does not even require the hassle of form filling. Apart from this, the employees have easy access to the savings, so they can make withdrawals anytime. But this plan also charges penalty of 25% if the person wants to withdraw before they are 60 years old.

So it’s time to go through all the guidelines and secure your retired life for a better tomorrow.

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