SIMPLE IRAs

A SIMPLE IRA, or SIMPLE plan, allows smaller employers to establish a retirement plan for their employees.  Savings Incentive Match PLans for Employees, or SIMPLE IRA plans, can be set up as part of the company's 401(k) offering, or by using Roth and Traditional IRAs.

SIMPLE IRAs offer a tax advantage to employees, since the plan allows the employee to make tax deferred contributions.  Employees agree to reduce their salary by a fixed percentage each pay period, and employers can provide matching contributions.  The amounts deducted, and contributed, are then directed to an account on your behalf.  In 2011, the SIMPLE plan contribution limit stood at $11,500.