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As a business owner, one of your biggest challenges is attracting and retaining quality employees. One smart way to meet this challenge is to offer a retirement plan.
The SIMPLE IRA (Savings Incentive Match Plan for Employees of Small Employers Individual Retirement Account) and the 401(k) plan are two retirement plans to consider. Both feature salary deferrals from your employees with matching contributions from you. The key is choosing the plan that is best suited to your tax situation, company size and company growth plans.
Eligibility for Establishing a SIMPLE IRA
The SIMPLE IRA provides an alternative to a 401(k) plan for owners of small businesses.
Employer Contribution Requirement
The 401(k) plan is the most well-known and widely used employer-sponsored retirement plan in the United States.
Combined Employer and Employee Contributions
Your business challenges you to find better ways to offer products or services to your customers. Offering a retirement plan can help you attract and retain the quality employees you need to meet your business goals.
What is a 401(k) discrimination test?
What does an "eligible" employee mean for a SIMPLE IRA?
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.
2For 2014, contributions may only be based on the first $260,000 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 not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.
Federal contribution limits are listed on this page. Some states and localities may have tax, community property or other laws that are different from the federal laws.