The SIMPLE IRA
was established so that small business owners could offer a retirement plan to their employees without a lot of hassle or record keeping. A lot of stock brokers
such as Charles Schwab & Company will administer these plans for the small business at little or no cost. In most cases, employers are required to contribute either a 3% dollar-for-dollar match on employee contributions or 2% of payroll to SIMPLE IRA accounts setup for each employee.
For tax years 2009 and 2010, the annual SIMPLE IRA contribution limit is $11,500 per year for most people, and $14,000 for those who are 50or older. SIMPLE IRA contribution orders are tax-deductible at the time they are made, and when the money is withdrawn year later, is taxed like ordinary earnings.
For more information, read our Guide to Retirement Account Contribution Limits.
SIMPLE IRA Contribution Limits for 2009 and 2010
|Year||Standard Annual Contribution||Catch-Up Compensation (50 and Older)|