What the heck is a Simple IRA?
The SIMPLE IRA is an acronym for Savings Incentive Match Plan for Employees. This plan allows employees and employers to contribute to a Traditional IRA which is set up for employees.
The ideal use of the SIMPLE IRA is for start-up retirement savings plans for small employers not currently offering any sort of retirement plan.
I’ve touched on these statistics before but did you know that:
- the average 50-year-old only has $42,797 saved.
- 45% of Americans having nothing saved.
- 38% don’t actively save for retirement at all.
- 20% of Americans tap into their 401k savings early, either thru a loan or early withdrawal
- 80% believe they will not have enough savings when they retire.
These numbers scare the crap out of me and that is why we are here talking about this subject.
If I can make the difference with just one person my mission will be complete.
This is why we are talking about all the different retirement plans out there so you have some ideas of which would be the best fit for you. And how they could help you.
Benefits of a SIMPLE IRA
1. Very easy to setup.
A Simple IRA is very easy to setup and is ideal for the small business that wants to offer a retirement plan for their employees.
There are no start-up costs and no operating costs of a conventional retirement plan.
It is available to any small business with less than 100 employees. And it is easily established by filling out a few forms. These forms are available at IRS.gov.
There are no filing requirements for the employer, but keep in mind that they may not have any other retirement plan currently setup.