SIMPLE IRAs

Even with an acronym like SIMPLE, the Savings Incentive Match Plan for Employees IRA can be intimidating. At Edward Jones, we'll take the time to educate you on how they work.

A SIMPLE IRA allows your employees to contribute to the plan through salary deferrals. You're also responsible for making contributions to the plan. Consider this plan if:

• You're looking for a primarily employee-funded plan with low required employer contributions.
• You have 100 or fewer employees who have earned at least $5,000 for the previous year.
• You don't maintain another retirement plan during any part of the calendar year.

Highlights

• Administration is simple and costs may be low.
• Your required contributions as the employer are low.

Contribution features

• Participants may contribute on a pretax basis, up to the annual limit of $14,000 for 2022.
• Individuals age 50 or older may make catch-up contributions for 2022 up to $3,000 for a total of $17,000.
• Employer contributions are tax-deductible.
• All contributions are 100% vested to the employee.
• Employees of any age may participate in the plan.
• A 25% penalty tax may apply if assets are withdrawn within two years of the participant's first contribution.

Deadlines

• Setup deadline:
  • A plan cannot have an effective date later than Oct. 1 for current-year contributions.
• Contribution deadline:
  • You must make contributions by your business's tax-filing deadline.
  • You must deposit salary deferral contributions up to 30 business days after the end of the month they were deferred.

How we can help

If you're looking for a low-cost retirement plan for your employees, make sure to consider a SIMPLE IRA. Your local Edward Jones financial advisor can help you explore your options.