SIMPLEs, or Savings Incentive Match Plans for Employees, are retirement plans that small business owners can open for their employees. Many plans do not have a designated financial institution, so employees may hold their SIMPLE individual retirement account (IRA) at the brokerage of their choice.
SIMPLE IRAs at Scottrade
If your employer offers a SIMPLE IRA, you can hold your IRA at Scottrade just like other types of IRAs.
With your SIMPLE IRA at Scottrade, you are able to choose your own investments and manage your retirement savings. Contributions are made by the employer via salary deferral and an employer match up to a legal maximum of $12,500 a year in 2016. Additional contributions, known as 'catch-up contributions,' of no more than $3,000 a year are permitted for employees age 50 and over.
SIMPLE IRA savings may be withdrawn at any time, but additional penalties will apply if you take a distribution before age 59½. When money is withdrawn, it will be taxed as income (similar to a Traditional IRA). Also like Traditional IRAs, SIMPLE IRAs are subject to minimum required distributions after age 70½.
Salary reduction contributions can be excluded from your gross income for tax purposes, but they are still subject to Social Security, Medicare and federal unemployment taxes.
For complete details of SIMPLE IRA plans and accounts, visit www.irs.gov and search for SIMPLE IRAs.
This material is for informational purposes only and Scottrade is not responsible for any errors or omissions. The information is subject to change without notice and should not be construed as a recommendation or investment advice. Please consult your tax or legal advisor(s) for questions concerning your personal tax or financial situation.