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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
March/April 2018
A Simple Retirement Benefit
Looking for a simple way you and employees can save for retirement? With so many options, deciding can be hard. But the SIMPLE (Savings Incentive Match Plan for Employees) IRA is one such plan, allowing employees and employers to contribute to IRAs set up for employees.
Designed for Small Business
If your company had no more than 100 total employees who earned $5,000 or more during the preceding calendar year and does not have an existing retirement plan, you qualify to set up a SIMPLE IRA plan any time before October 1 of the year it is established. You have a choice of two plan models.
With the first, you must match every employee’s contribution dollar-for-dollar up to 3% of each individual’s compensation, (to certain annual limits). You may choose to make a matching contribution of less than 3%, but greater than 1%, in no more than two out of five years.
The second formula is a non-elective contribution of 2% of each employee’s compensation up to $270,000 in 2017 and up to $275,000 in 2018. With both, employees immediately vest. Remember, you may be an owner, but you’re also an employee.*
Watch Withdrawals!
Participants may take distributions from a SIMPLE IRA without penalty (but subject to ordinary income taxes) after age 59 ½, and before that age under certain exceptions. They include disability, qualified higher education expenses and up to $10,000 for first-time home-buying costs.
Non-qualified distributions taken before that age incur a 10% additional tax after you participate in the plan for two years or a 25% additional tax during the first two years of participation.
For Employers
If you maintain this plan, you must contribute to each employee’s IRA (either the match or mandatory 2%) by your tax filing deadline, plus extensions.
Employees may electively contribute up to $12,500 using the employee deferral option, plus another $3,000 if they are age 50 or older. Talk to your financial professional about how a SIMPLE IRA or other qualified plan might fit with your business.
*https://www.irs.gov/retirement-plans/simple-ira-plan-faqs-contributions
GE 129810 (9/17)(Exp 9/19)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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