A Simple IRA is a retirement plan for small businesses (100 employees or less) that allows both employers and employees to contribute to retirement savings.
In Depth
A Simple IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) is a retirement plan designed for small businesses with 100 or fewer employees. It allows both employers and employees to contribute to an individual retirement account. Employers must either match employee contributions up to 3% of their pay or make a non-elective contribution of 2% of each eligible employee's pay. It's a less complex option compared to a 401(k) for small businesses.
Example
Sarah's small business offers a Simple IRA, allowing her to save for retirement with contributions matched by her employer.