American Wealth Management Financial Advisors Boyong Park and DJ Lee of Reno, Nevada, sit down to further explain the SIMPLE-IRA plan, one of the business retirement plan options. In this video, we will discuss the benefits of this plan, including contribution and distribution rules.

Schedule a free consultation with Bo or DJ by calling American Wealth Management at 775-332-7000.

이번시간에는 박보용과 이동준 자산관리사를 통해 회사 은퇴 계좌인SIMPLE-IRA에 대해서 좀 더 알아보도록 하겠습니다. 또한 회사은퇴계좌의 장점, 적립방법 그리고 인출방법에 대해서도 알아보겠습니다….(read more)

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As a small business owner, planning for retirement can be a challenge. With the various responsibilities that come with running a business, it’s easy to overlook the importance of setting aside funds for the future. Fortunately, the SIMPLE-IRA is specifically designed to help small business owners save for retirement.

The SIMPLE-IRA is a retirement plan that stands for “Savings Incentive Match Plan for Employees.” It is available to businesses with 100 or fewer employees who earned $5,000 or more in the preceding year. This plan offers tax benefits, ease of administration, and flexible contribution options making it an attractive retirement planning tool for small business owners.

One of the essential features of the SIMPLE-IRA is that both the employer and employees can contribute to the account. Employers can contribute a percentage of their employees’ compensation up to 3% for each employee who participates in the plan. Employees can contribute up to $13,500 or $16,500 if they are 50 years or older. These contributions are tax-deductible, which means that business owners can reduce their taxable income by contributing to their employees’ retirement plans.

Another perk of the SIMPLE-IRA is the ease of administration. Contributions can be made using an automatic payroll deduction or through a salary reduction agreement. Additionally, employers are not required to file reports with the IRS or submit an annual tax return for the plan. The plan’s simplicity reduces the administrative burden on small businesses.

SIMPLE-IRA accounts can be opened at banks, brokerage firms, or other financial institutions. Business owners can choose from a range of investment options such as stocks, bonds, and mutual funds. Employees have the flexibility to manage their own investments and can choose to change their allocation at any time.

The SIMPLE-IRA has a few limitations. The contribution limit is lower than other retirement plans such as the 401(k), which limits contributions to $19,500 or $26,000 for employees over the age of 50. Additionally, businesses with more than 100 employees are not eligible for the SIMPLE-IRA.

In conclusion, the SIMPLE-IRA is a valuable retirement savings plan for small business owners. It offers tax benefits, simple administration, and a range of investment options. The contributions made by the employer and employees help to build a retirement nest egg that will provide financial security in the future. By taking the necessary steps to plan for retirement, small business owners can secure their financial future and that of their employees.