Individual Retirement Accounts • SIMPLE IRAs • Eligibility • Contributions • Distributions • Plan Administration
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is available to employers with 100 or fewer employees who have no other qualified plan. Eligible employees must have earned at least $5,000 in any two preceding years and expect to earn $5,000 in the current year. All SIMPLE plans operate on a calendar year basis.
Employee elective deferrals in 2026: $17,000 (standard) or $18,100 (employers with ≤25 employees). Employers must contribute either a dollar-for-dollar match up to 3% of compensation, or a nonelective contribution of 2% of compensation (capped at $360,000) for all eligible employees. All contributions are 100% immediately vested. Premature distributions in the first two years carry a 25% penalty (vs. the standard 10%). RMDs begin at age 73.