A SIMPLE and Effective Retirement Solution for Small Business Owners

For small businesses looking to offer a retirement plan that supports both the owner and employees, the SIMPLE IRA (Savings Incentive Match Plan for Employees) is a powerful option. It’s designed specifically for businesses with 100 or fewer employees and offers a balance of ease, affordability, and employee participation.

What Is a SIMPLE IRA?

A SIMPLE IRA is a retirement plan that allows both employers and employees to contribute. It’s a great way for small businesses to offer a benefit that helps attract and retain talent—without the complexity of a traditional 401(k).

SIMPLE IRA Key Features:

• Employee contributions: Employees can contribute through payroll deductions, up to $16,500 in 2025 (plus a $3,500 catch-up for those 50+).
• Employer match or contribution required: Employers must either:
  • Match employee contributions up to 3% of compensation, or
  • Contribute 2% of compensation for all eligible employees, regardless of participation.
• Tax advantages: Contributions are tax-deductible for the business, and employee contributions reduce taxable income.
• No annual IRS filing: Like the SEP, generally, there’s no annual filing requirement for the employer.

• Easy to Set Up – Just One Form: In most cases, employers typically complete IRS Form 5304-SIMPLEor 5305-SIMPLE, to establish a SIMPLE IRA plan

Who Is a Good Fit for a SIMPLE IRA?

SIMPLE IRAs are ideal for:

• Small businesses with steady income and less than 100 employees
• Owners who want to offer a benefit to attract and retain employees
• Businesses where employees are likely to contribute and value retirement savings

Remember, since employees can contribute and employers are required to match or contribute, SIMPLE IRAs work best for businesses that want to invest in their team and are comfortable with predictable annual contributions.

SIMPLE IRA Resources

Need help getting started? Take a look at the various tools and materials to make it easier to talk about retirement plans and support small business clients with confidence.

What is a SIMPLE IRA Flyer

We’re here to help

Click here to contact your Retirement Services Relationship Manager.

This information is not intended as tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor.