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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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%.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
There are many parallels between it and Keynes's biography of Ramsey in the March 1930 Economic Journal: Ramsey's death was a grievous loss/heavy loss; he was intellectually precocious/his precocious mind; he was built physically on a large scale/his bulky Johnsonian frame; he combined great simpleness of mind and manner and character/the simplicity of his feelings and reactions.
As James Wood writes in an excellent essay, "The Unwinding Stair," it seems to have the simpleness of the unclothed, unselfconscious ages.
There's something charming and fascinating about our simpleness and our ability just to put it out there on our sleeve, that this is who we are.
simples, like the simpleness of God, making places for their own.
(36) If the devotee then violates Soma's laws, we should note (recalling 1.25.1) that the violation arises from a typical human failing in the face of divine vratas in general, and not from a singular occurrence: "Indeed, I violate your ordinances through simpleness, O Soma.
The breadline sequence, while clearly suggesting ideas about class, does not rely on the comedic value of inequity, as it might in Chaplin, but on the hero's simpleness and bad timing.
And when the Duke says: "For never anything can be amiss/When simpleness and duty tender it," he is revealed- through the medium of the mechanicals--to be a compassionate leader.
Their combined IQs may not go into double figures, but in their simpleness there is honesty, honour and humour.
In a largely mute role, Liska is touchingly sympathetic, hinting at rather than underlining the central character's simpleness. Tech credits are finely tuned, with d.p.