SIMPLE IRA
Denver business owners (with no more than 100 employees), may appreciate the SIMPLE IRA because it is a fast, "simple" plan that is easy to set up. Sharkey, Howes & Javer can help you complete the required short form to establish a plan and ensure that IRA accounts are established for each one of your employees.
We can set up your accounts at Charles Schwab or TD Ameritrade. Your administrative costs are low, eligible employees fund their own accounts by way of regular salary deferrals and you contribute additional contributions to their accounts. Your employees may contribute up to $10,500 in salary deferrals or $13,000 if they are age 50 or older. You may either match employee salary deferrals up to 3% of their W-2 compensation (which can be reduced to 1% in any two out of five years if desired) or contribute 2% of each employee's compensation, up to $4,600.
It is important for you to know that your employees are 100% vested in your contributions. Your employees decide how and where the money will be invested, and they get to keep their IRA accounts even when they change jobs. Your employees may withdraw their accounts at any time, but a 25% penalty may apply if taken within the first two years of participation in the plan and a 10% penalty may apply if they are under 59½. If this plan seems right for you, it needs to be established by October 1st of each year. There are no IRS tax filings. Contact Scott Brookes, AIF® for more information.
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