SIMPLE IRA

(Savings Incentive Match Plan for Employees)

A retirement plan similar to a 401(k) 

  • Easy and inexpensive to administer
  • For businesses with fewer than 100 employees
  • Deductible employee and employer contributions
  • Use the Small Business Selector to find a plan

annual salary deferrals
(if under age 50)

$12,500/year in 2018 ($13,000/year in 2019)

annual salary deferrals
(age 50 or over)

$15,500/year in 2018 ($16,000 in 2019)

Eligibility information - image

Eligibility information

Available for self-employed individuals and business owners with fewer than 100 employees

Setup and contribution deadline - Image

Setup and contribution deadline

Must be established by October 1. Contribution deadline is the employer's tax filing deadline, including extensions.

Easy setup and administration - image

Easy setup and administration

IRS Form 5500 filing not required

The flexibility to invest how you want -  image

The flexibility to invest how you want

Let E*TRADE Capital Management manage your account, or diversify with a choice of mutual funds, ETFs, stocks, and more

Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works

Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works

SIMPLE IRA FAQs

See all FAQs

Already have a SIMPLE IRA? Contribute now.

Can a business owner establish a SIMPLE IRA if currently sponsoring another retirement plan?

No. If a business owner currently maintains another employer-sponsored retirement plan, they may not establish a SIMPLE plan for the same tax year when contributions were made to that plan.

Do employer contributions have to be made to all eligible employees?

It depends. If a non-elective employer contribution option is chosen, contributions have to be made to all eligible employees whether they choose to participate in the plan or not. However, if a matching contribution option is chosen, contributions are only made to employees who are participating in the plan (i.e. making salary deferral contributions).

Can an employer or employee make contributions to a SIMPLE IRA while contributing to a Traditional IRA?

Yes. An individual may have both accounts. However, since an individual will be considered an active participant in an employer-sponsored retirement plan, some or all of the contributions to a Traditional IRA may not be deductible. Refer to the Contribution Limits and Deadlines table for more information.

What are the basic distribution rules for a SIMPLE IRA?

Generally distributions from a SIMPLE IRA are subject to the same distribution rules as a Traditional IRA. SIMPLE IRA distributions may be taken at any time and are taxable in the year distribution occurs. Withdrawals taken prior to age 59½ are subject to an additional 10% early distribution penalty. However, if a distribution from a SIMPLE IRA is taken within 2 years of first participation in the plan, the 10% early distribution penalty is increased to 25%.

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