SIMPLE IRA: What It Is and How It Works

A SIMPLE IRA is a retirement plan that allows the self-employed and small business owners to contribute funds toward their employees savings and that of their own.

A retired couple look over their finances.
(Image credit: Getty Images)

For many small business owners, setting up an employee retirement plan is expensive, complex, and requires federal filing they’d rather not deal with. A SIMPLE IRA is a retirement savings designed for small businesses with 100 or fewer employees. The lower costs and ease of setup make it appealing for small business owners who don’t want to break the bank to provide their employees with a retirement plan. 

How does a SIMPLE IRA work?

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Seychelle Thomas
Contributing Writer

Seychelle is a seasoned financial professional turned personal finance writer. She’s passionate about empowering people to make smart financial decisions by combining 10 years of finance industry experience with solid research and a wealth of knowledge. Seychelle is also a Nav-certified credit and lending expert who has explored money topics such as debt consolidation, budgeting, credit, and lending in her work for publications including GOBankingRates, LendEDU, and Credible.