Plan details
SIMPLE IRA
A Savings Investment Match Plan for Employees (SIMPLE IRA) makes it easier for self-employed individuals and small-business owners with 100 or fewer employees to offer tax-advantaged retirement plans.
Key facts and details
| 401(k) Plan 401 Employer Sponsored Plan | Self-Employed 401(k) Individual 401(k) Plan | SEP IRA Simplified Employee Pension Plan | SIMPLE IRA Savings Incentive Match Plan | PDBP Personal Defined Benefit Plan | CRA Company Retirement Account |
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| Contributions | Employers may contribute up to 25% of compensation, up to a maximum of $61,000 in 2022 Employees may contribute up to $20,500 for 2022 ($27,000 if 50 or older) The total employer and employee contributions cannot exceed $61,000 in 2022 | Maximum combined contribution, including salary deferral, cannot exceed $58,000 for tax year 2021 (or $64,500 if age 50 or over); $61,000 for tax year 2022 (or $67,500 if age 50 or older) Make profit-sharing contributions up to 20% of your self-employment income, up to a maximum of $58,000 for 2021 and $61,000 in 2022. Make a pre-tax salary deferral up to $19,500 for 2021 and $20,500 for 2022 (or $26,000 for 2021 and $27,000 for 2022 if age 50 or older). | Flexible annual funding requirements Employers may contribute between 0% and 25% of compensation up to a maximum of $58,000 for 2021 and $61,000 for 2022. Eligible employees must receive the same percentage | Participants may contribute up to 100% of compensation with a maximum of $14,000 for 2022 ($17,000 if 50 or older) Employer contributes either a matching or a non-elective contribution | Funded with employer contributions only. Must be funded annually. Annual contribution levels are calculated based on age, compensation, and expected retirement age. Plan contributions are adjusted each year and may be amended (for additional fees) if the desired contribution level needs to be revised. | Determined by your existing plan. |
| Eligibility | A 401(k) plan is suitable for a company of any size that is looking for a retirement solution that allows high levels of salary deferrals by employees. Plans are generally offered to all employees at least 21 years of age who worked at least 1,000 hours in the previous year. | An Individual 401(k) plan is available to self-employed individuals and business owners, including sole proprietors, corporations, partnerships, and tax-exempt organizations with no employees other than a spouse. You must have a minimum 5% business share to be eligible. | A Simplified Employee Pension Plan (SEP-IRA) is specifically designed for self-employed individuals and small business owners who want to save for retirement without getting involved in complex plan administration. If you are self-employed or have few employees, and if you want flexibility in the amount you contribute annually—particularly if you want to make high contributions—a SEP-IRA might be right for you. | A SIMPLE IRA may be appropriate for businesses with 100 or fewer employees seeking a low-cost plan that’s easy to administer and maintain. If you are self-employed or own a business with 100 or fewer employees, you are eligible to establish a SIMPLE IRA plan, as long as it is the only retirement plan you fund. Companies maintaining another employer-sponsored retirement plan in the same year are not eligible. You must generally include all employees age 21 and over if they received at least $5,000 in compensation during any two prior years and if you reasonably expect that they will receive at least $5,000 in the current year. | For professionals age 50 or over who can make annual contributions of $90,000 or more for at least five years and who have few, if any, employees. For people who are looking for a quick way to increase their retirement assets. | Requires an existing customized retirement plan. |
| Fees | Fees vary and are based on business needs and solutions. Global Advisers charges an annual management fee. Other account fees, fund expenses, and brokerage commissions may apply. | Custodian Fees: Monthly service fees: $0 $0 account open or maintenance fees Commissions: $0 per online listed equity trades Other account fees, fund expenses, and brokerage commissions may apply Advisory fees: Global Advisers charges an annual management fee. | Custodian Fees: Monthly service fees: $0 $0 account open or maintenance fees Commissions: $0 per online listed equity trades Other account fees, fund expenses, and brokerage commissions may apply Advisory fees: Global Advisers charges an annual management fee. | Custodian Fees: Monthly service fees: $0 $0 account open or maintenance fees Commissions: $0 per online listed equity trades Other account fees, fund expenses, and brokerage commissions may apply Advisory fees: Global Advisers charges an annual management fee. | Custodian Fees: Monthly service fees: $0 $0 maintenance fees Annual services fees apply Commissions: $0 per online listed equity trades Other account fees, fund expenses, and brokerage commissions may apply Fees may be a deductible business expense in the year they are paid. Without submission to the IRS: $1,500, plus $250 for each participant in excess of two With submission to the IRS: $3,000 to $3,750, plus applicable IRS filing fee, currently $3,000. The IRS reserves the right to change the filing fee at any time. PBGC-covered plans: $400 for a request to remove coverage only; $800 for PBGC standard termination Advisory fees: Global Advisers charges an annual management fee. | Custodian Fees: Monthly service fees: $0 $0 account open or maintenance fees Commissions: $0 per online listed equity trades Other account fees, fund expenses, and brokerage commissions may apply Advisory fees: Global Advisers charges an annual management fee. |
| Investment Options | A wide range of mutual funds, stocks, bonds, ETFs, and more. | A wide range of mutual funds, stocks, bonds, ETFs, and more. | Full range of investment options. | A wide range of mutual funds, stocks, bonds, ETFs, and more. | Stocks, bonds, mutual funds, exchange-traded funds (ETFs), and certificates of deposit (CDs). | Full range of investment options. |
| Tax Benefits | Employee contributions are generally made with pre-tax dollars, although some 401(k) plans feature after-tax Roth contributions. Earnings grow tax-deferred. | Contributions to a Self-Employed 401(k) plan are tax-deductible. Earnings grow tax-deferred and assets are not taxed until they are withdrawn in retirement. | Employer contributions are tax-deductible. Earnings grow tax-deferred and are not taxed until they are withdrawn. | Employer contributions are tax-deductible. Earnings grow tax-deferred, and you pay no taxes on assets until you withdraw them in retirement. | Contributions are generally 100% tax-deductible, within IRS limits. Earnings grow tax-deferred and are taxable when withdrawn. | Determined by your existing plan. |
| Withdrawals | Cannot take withdrawals from the plan until a “trigger” event occurs, such as turning age 59½, disability, or death. 10% early withdrawal penalty applies if you are under age 59½ and taking a distribution. Required minimum distributions start at age 72. | You must have a triggering event—generally either termination of employment or retirement—to take a distribution. Withdrawals before age 59½ may be subject to a 10% penalty. Distributions are subject to a mandatory 20% federal tax withholding, except for Required Minimum Distributions (RMDs), hardship withdrawals, and direct rollovers. If you own 5% or more of the business, you must begin taking RMDs annually, starting with the year you reach age 70½ (if you were born before July 1, 1949) or age 72 ( if you were born on or after July 1, 1949). If you don’t start taking RMDs when required, or if you take less than the required amount, you'll face a 50% penalty on the total amount of the distribution. You may not take loans from your Individual 401(k) account. | You can start making penalty-free withdrawals from your account after age 59½. If you do not start Required Minimum Distribution (RMD) withdrawals by age 70½ (if you were born before July 1, 1949) or age 72 (if you were born on or after July 1, 1949), or take less than the required amount, you will face a 50% penalty on the total amount of the distribution. There are certain exceptions for which you can withdraw funds before age 59½ without taking a 10% penalty, including a rollover to another IRA, some higher education expenses, qualified first-time home purchase expenses, death, disability, and certain medical expenses. | Withdrawals are penalty-free after age 59½. If you do not start Required Minimum Distributions (RMDs) by age 70½ (if you were born before July 1, 1949) or age 72 (if you were born on or after July 1, 1949), you will face a 50% penalty on the total amount of the distribution. Withdrawals before age 59½ are subject to a 10% penalty, and the penalty is increased to 25% if the withdrawal occurs within the first two years of participation in the SIMPLE IRA. | Penalty-free distributions may be received upon retirement or termination of service. Required Minimum Distribution (RMD) withdrawals must begin by age 70½ (if you were born before July 1, 1949) or age 72 (if you were born on or after July 1, 1949), even if you are still working. You may receive your benefit payout by rolling assets into an IRA, setting up an annuity, or receiving a lump-sum distribution. If you don’t start RMDs when required or take less than the required amount, you will face a 50% penalty on the total amount of the distribution. Withdrawals before age 59½ are subject to a 10% penalty. There are certain circumstances in which you may be eligible to withdraw funds before age 59½ without taking a 10% penalty. Contact us at 1-844-GALLEON to learn more. | Determined by your existing plan. |