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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.


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.


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 periodicals archive ?
Furthermore, 2003 saw a clear switch in motivation of the virus writer -- intellectual challenge or simple-minded cyber-vandalism is no longer the primary motive.
And yet as silly as the performance is, it has nothing on the movie's simple-minded politics (boy, those gun people sure are evil
WOMEN-IN-PRISON movies have never been known for their subtlety, and while Neema Barnette's godawful addition to the genre, ``Civil Brand,'' doesn't contain some of the movies' hallmark scenes (no strip searches, rampant lesbianism or baby-doll nightgowns), it more than compensates with a heavy-handed political message that is as simple-minded as it is artless.
And its use of real-life pundits (on ``Curveball,'' one of those idiot news-channel shows that offers bread-and-circuses for the civilian's simple-minded edification, but you can't imagine someone inside-the-beltway like Novelli taking it seriously) adds nothing to the show's middle-brow ersatz verisimilitude.
Of course, if Smith had bothered to write a decent script instead of a pastiche of simple-minded jokes about oral sex, gays and penises, then maybe spending time with the title characters wouldn't be as much of an exercise in boredom.
But sometimes complex problems require more than a simple-minded solution.