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SIMPLE IRAs are generally funded with both employer contributions and employee contributions. Employee contributions, generally referred to as salary-deferred contributions, are made on a pre-tax basis from the employees’ paycheck, which reduces their taxable income. The level for contribution per each employee is $10,000 and an additional $2,500 for individuals over 50 years of age (2006). Similar to the SEP IRA, contributions to the SIMPLE IRA, including those made by the employer, are immediately 100% vested. Employer contributions to SIMPLE IRAs are usually mandatory for the years the SIMPLE IS maintained.
If you need further information on this retirement plan or any of the other services LPL Financial offers please contact your LPL Financial Consultant either by telephone at 888.801.1666 or via our easy inquiry form online.
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