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 ?
I have always been made sad when I have heard members of any race claiming rights or privileges, or certain badges of distinction, on the ground simply that they were members of this or that race, regardless of their own individual worth or attainments.
I think this was a pity, but it was a thing not to be helped, like a great many things that happen to our hurt in life; it was simply inevitable.
If a strange person comes near the place he simply loses his head.
To my great surprise, I found it simply impossible to fix my mind on the subject.
He now simply said, "Well, my friends, what quantity of powder do you propose?
This powder, now called pyroxyle, or fulminating cotton, is prepared with great facility by simply plunging cotton for fifteen minutes in nitric acid, then washing it in water, then drying it, and it is ready for use.
Yet at that moment the light that shone from them was simply one of fear, half curious, half shrinking.
Now she was afraid that Vronsky might confine himself to simply flirting with her daughter.
What it amounted to was that you simply couldn't understand women.
What generous impulses he has, and how simply, how delicately he put an end to all the misunderstanding with his sister--simply by holding out his hand at the right minute and looking at her like that.
I am simply marrying for my own sake, because things are hard for me.
You are intentionally lying, simply from feminine obstinacy, simply to hold your own against me.