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 ?
The Simpleton thanked the manikin very kindly, bade him farewell, and went into the road.
I have been called an unkind mother, but it was the sacred impulse of maternal affection, it was the advantage of my daughter that led me on; and if that daughter were not the greatest simpleton on earth, I might have been rewarded for my exertions as I ought.
You simpleton,' said the eldest, 'you are always afraid; have you forgotten how many kings' sons have already watched in vain?
My dear creature," she replied, "do not think me such a simpleton as to be always wanting to confine him to my elbow.
If you were not such a charming simpleton, what a temptation this would be to play the wicked coquette, and let you suppose that somebody besides you has made love to me.
At first he seemed only a pleasure-loving simpleton, of whose company I was rather ashamed, and whom I used to hide under my coat when I walked the Embankment, in London.
The hero of the epic is at once sciolist and simpleton, `knowing many things, but knowing them all badly'.
I should like to know how the weavers are getting on with my cloth," said the Emperor to himself, after some little time had elapsed; he was, however, rather embarrassed, when he remembered that a simpleton, or one unfit for his office, would be unable to see the manufacture.
This poor simpleton has been robbed of four gold pieces.
As to my cousin Sophia, I can't imagine her to be such a simpleton as to have the least scruple on such an account, or to conceive any harm in punishing one of these haggs for the many mischiefs they bring upon families by their tragi-comic passions; for which I think it is a pity they are not punishable by law.
It was about a humorous lecturer who flooded an ignorant audience with the killingest jokes for an hour and never got a laugh; and then when he was leaving, some gray simpletons wrung him gratefully by the hand and said it had been the funniest thing they had ever heard, and "it was all they could do to keep from laughin' right out in meetin'.
I'm sure I don't know why children o' my bringing forth should all be bigger simpletons than other people's--not to know better than to blab such a thing as that, when he couldn't ha' found it out till too late