Employers can Keep IRA Plans Simple

As traditional pensions continue to fall by the wayside in employer benefits packages, employees are becoming increasingly responsible for saving for their own retirement. Even still, many small employers offer neither a pension or any retirement savings options to their employees.

However, small business owners do have one retirement savings plan option available to them that’s simple for everyone. This is called the Savings Incentive Match Plan for Employees, or more commonly the SIMPLE IRA. These retirement savings plans are available to small businesses employing 100 people or less, and they can’t be implemented alongside any other kind of savings plan.

However, they do come with a variety of incentives for small business owners. SIMPLE IRAs don’t require any annual IRS reporting, and their administration costs are much lower than traditional retirement savings plans. On the other side of the coin, employees enrolled in SIMPLE IRAs have several benefits available to them, as well. After two years of participating in the SIMPLE IRA, funds are treated as stand-alone IRA funds. This gives the employee flexibility to roll over their existing funds to a custodian with more investment options or lower costs while still contributing through their employer.

If you’d like to learn more about SIMPLE IRAs and their benefits, read our article, “Employers can keep IRA plans simple,” in Columbia Daily Tribune.

As a financial planner specializing in comprehensive financial planning, Tim enjoys helping clients in Columbia, MO with managing their taxes, financial risks and other financial issues.

If you would like to learn more about this and other personal financial planning topics serviced by Clarity Financial please contact us at 573-447-7007. Clarity Financial, LLC is a fee-only financial advisory firm in Columbia, MO. Appointments are welcome and initial consultations are free. 

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This article is the property of Clarity Financial LLC.