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LEARN MORE ABOUT: IRA Accounts

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CONVERTING IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

A Simple IRA, or a Savings Incentive Match Plan for Employees Individual retirement account, is a retirement savings plan available to small businesses with 100 or fewer employees. The plan allows employers and employees to contribute pre-tax dollars to a retirement savings account, similar to a 401(k) plan.

One of the primary benefits of a Simple IRA is that it allows employees to save for their retirement years by contributing a portion of their salary to the plan on a tax-free basis. Employers can also make contributions to the plan, allowing employees to benefit from both their own contributions and the contributions from their employer.

Unlike other retirement plans, Simple IRAs are relatively easy to set up and maintain. The plan also has lower administrative costs compared to other retirement plans, making it a more cost-effective option for small businesses.

To be eligible for a Simple IRA, an employer must have no more than 100 employees who have received at least $5,000 in compensation in the previous year. Additionally, the employer must not have any other retirement plan in place.

Employees can contribute up to $13,500 per year to their Simple IRA, while employers can contribute up to 2% of the employee’s salary. For example, if an employee earns $50,000 per year, the employer can contribute up to $1,000 to their Simple IRA.

The funds contributed to a Simple IRA are invested in mutual funds, stocks, bonds or other investments. The earnings on the account are tax-deferred until withdrawn, allowing the account to grow tax-free over time.

Withdrawals from a Simple IRA can begin at age 59 ½. Early withdrawals may be subject to taxes and penalties.

If you’re a small business owner looking for a retirement savings plan, a Simple IRA may be an excellent option. At Walsh Financial Services, we can help you set up and manage your Simple IRA, ensuring that your employees can benefit from a tax-efficient retirement savings plan. Contact us today to learn more about our retirement planning services.