SIMPLE IRA
RetirementGlossary term
Definition
A Savings Incentive Match Plan for Employees IRA designed for small businesses with 100 or fewer employees. Employers must either match employee contributions up to 3% of compensation or make a 2% nonelective contribution for all eligible employees.
Related terms
- SEP IRASimplified Employee Pension IRA designed for self-employed individuals and small business owners. Allows higher contribution limits than traditional IRAs, up to 25% of compensation.
- Traditional IRAA retirement account with tax-deductible contributions (if eligible) and tax-deferred growth. Withdrawals in retirement are taxed as ordinary income. RMDs required at age 73.
- 401(k)A tax-advantaged retirement savings plan offered by employers that allows employees to contribute a portion of their salary before taxes. Many employers offer matching contributions up to a certain percentage.
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