SIMPLE IRA Plan Details

SIMPLE IRA stands for Savings Incentive Match Plan for Employees of Small Employers Individual Retirement Account. It's a retirement plan for employers who want to offer a retirement plan that allows both employer and employee contributions.

Employer Advantages
  • Separate employer website (not available for American Century® Brokerage).
  • Substantially reduced administration cost from what is normally associated with operating a qualified retirement plan.
  • Contributions are a deductible business expense.
  • American Century Investments® may act as the Designated Financial Institution, which means we will process all contributions and assist the employer with his or her annual employee notification requirements by providing the necessary paperwork.
Eligible Employers
  • Any employer, including corporations, partnerships, sole proprietorships, independent contractors and self-employed individuals.
  • Employers who have had no more than 100 employees who each earned at least $5,000 during the prior year.1
  • Employer is not currently making contributions to any other employer-sponsored retirement plan during the calendar year in which the SIMPLE IRA is maintained.
Annual Contribution Limits
Employer Required-Employers can match contributions dollar for dollar, up to 3% of an employee's compensation -or- contribute a flat 2% of each eligible employee's compensation3.
Employee 2017 $12,500
Annual "Catch-Up" Contribution Limits for Employees Age 50+ (in addition to annual contribution) 2017 $3,000
Initial Paperwork
  • IRS Form 5305-SIMPLE
  • SIMPLE IRA Application
Annual Paperwork
  • Model Notification to Eligible Employees
  • Summary Description
  • IRS Form W-2 (if the plan has multiple participants)
Deadline for Establishing Plan October 1 for the year in which the plan is to be effective.
Investment Choices
  • Funds held directly with American Century Investments: Select from a variety of mutual funds based on your risk tolerance and investment objectives. Select a fund and review its prospectus kit.
  • American Century Brokerage: Choose from over 10,000 mutual funds, as well as publicly traded stocks, bonds, and more.
Annual Fees
  • Funds held directly with American Century Investments: Each participant pays a $15 annual custodial fee per fund. The fee is waived if the participant's total investments have a combined value of at least $10,000.
  • American Century Brokerage: A $50 annual custodial fee is charged per account. This fee is waived for Platinum, Gold and Silver Priority Investors or if the balance of the account is over $10,000. See Fees and Commissions for more information.
Eligibility Requirements Employees must have received up to $5,000 in compensation during any two preceding years and are expected to receive at least $5,000 during the current year.2
Maximum Vesting Schedule Employee contributions are 100% vested at all times.
  • Early withdrawal penalties may apply for withdrawals prior to age 59½.
  • Withdrawals for special purposes may be permitted prior to retirement.
Secure Online Account Access Participants create a User Name and Password and Log In for secure online account access, to:*
  • View account balances
  • Conduct online transactions
  • View tax forms (if available)
  • And more.
Employers can Log In for secure online plan access, to:**
  • View plan assets
  • Transmit contributions

*Certain online transactions and maintenance are not available for all accounts, including American Century Brokerage accounts.

**Online plan access is not available for American Century Brokerage accounts.


1For purposes of determining the 100 employee limitation, all employees employed at any time during the calendar year are taken into account, regardless of whether they are eligible to participate.
2Eligibility requirements may be less restrictive at employer's discretion.
3For 2017, contributions may only be based on the first $270,000 of compensation, as adjusted.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.
Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member FINRA, SIPC.