SIMPLE

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Savings Incentive Match Plan for Employees of Small Employers

An IRA or 401(k) plan for employees of small businesses, usually with fewer than 100 employees. The employee may make tax deductible contributions, and the employer may contribute in one of two ways. The employer may either match employee contributions up to 3% of the employee's annual salary, or provide a contribution of 2% of the salary regardless of how much the employee contributes. The employee controls the investment of the contributions.

SIMPLE

A savings incentive match plan for employees that is similar to but more flexible than an IRA for businesses with 100 or fewer employees. Employees enter into a qualified salary reduction agreement to contribute a percentage of their annual compensation to a tax-deferred retirement account.

SIMPLE.

A SIMPLE, also known as a SIMPLE IRA, is short for Savings Incentive Match Plans for Employees, an employer sponsored retirement savings plan that may be offered by companies with fewer than 100 employees.

Employers must contribute to eligible employees' accounts each year in one of two ways. They can make a contribution equal to 2% of salary for every employee, or match dollar-for-dollar each employee's contribution to the plan, up to 3% of that employee's annual salary.

A SIMPLE may be set up by establishing an IRA in each employee's name or as a 401(k). Congress sets an annual dollar limit on the tax-deferred amount an employee may contribute, based on the type of SIMPLE it is. Contribution ceilings for SIMPLE-IRAs are lower than for other employer sponsored plans.

You may withdraw assets from a SIMPLE without penalty if you are 59 1/2 or older and retired. And you must begin taking minimum required distributions by April 1 of the year following the year you turn 70 1/2 unless you're still working. Taxes are due on distributions at your regular tax rate.

You may roll your assets over into another employer plan or an IRA if you leave your job for any reason or retire.

Two key differences between SIMPLEs and other employer plans are that your account must be open at least two years before you can withdraw or move the money, and the federal tax penalty for early withdrawal is 25% of the amount you take, rather than 10%.

References in classic literature ?
He was one of those simple-minded beings, who are shocked at listening to anything they are not intended to hear, or entering where they are not invited, and seeming bold when they are really timid, inquisitive where they are truly discreet.
Captain Jim was a high-souled, simple-minded old man, with eternal youth in his eyes and heart.
Its simple-minded and gigantic hero John Ridd is certainly one of the permanent figures of English fiction.
One day, in particular, an inoffensive, simple-minded pauper, whom with others I had often seen used as fencing stuff, standing or sitting on a bushel in the fields to keep cattle and himself from straying, visited me, and expressed a wish to live as I did.
He recalled them with simple-minded compunction at that distance of time.
My Lord Southdown, her late husband, an epileptic and simple-minded nobleman, was in the habit of approving of everything which his Matilda did and thought.
Ar rayed--I MUST say arrayed--arrayed artlessly in dazzling white paint as to wood and dark green as to ironwork the simple-minded distribution of these colours evoked the images of simple-minded peace, of arcadian felicity; and the childish comedy of disease and sorrow struck me sometimes as an abom inably real blot upon that ideal state.