Definition
A retirement plan for small businesses that allows both employer and employee contributions, offering tax advantages and simpler administration.
What to consider
- Set aside a small amount regularly for future expenses.
- Automate transfers so you’re not tempted to spend it.
- Use it to cover predictable costs like vacations or repairs.
Real world scenarios
- A local boutique owner sets up a SIMPLE IRA for her three employees, automatically matching a portion of their contributions each pay period.
- Kevin likes the straightforward rules of a SIMPLE IRA, making it easy to manage without extensive admin overhead.
- Contributions to a SIMPLE IRA help Raquel reduce her taxable income while building up retirement funds steadily.
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