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SIMPLE (Savings Incentive Match Plan for Employees) IRA

Wells Fargo Advisors1-877-493-4727
General DescriptionAs an employer, you can offer a salary deferral plan for your employees easily and affordably.

A SIMPLE IRA allows you to offer a salary deferral plan minus the cost or administrative responsibilities associated with traditional 401(k) plans.
Eligibility to Contribute
  • As an employer you can contribute for yourself and your employees at any age.
  • Works well for companies with 25 or fewer employees.
Maximum Annual Contribution
  • Employer (required): Either dollar-for-dollar matching up to 3% of compensation, or 2% of compensation to all eligible employees
  • Employee: Up to 100% of compensation or $12,000 for 2013 and 2014 (for those age 50 and over the limits increase to $14,500 for 2013 and 2014)
Tax-Deductible Contributions
  • Employers can deduct contributions from federal taxable income.
  • Employee can make pre-tax contributions.
Taxation of Earnings and WithdrawalsTax-deductible contributions and earnings are taxed as ordinary income when withdrawn.
Types of InvestmentsStocks, bonds and mutual funds available through a Wells Fargo Advisors brokerage account.
Withdrawal Penalties25% IRS early withdrawal penalty if withdrawn during the first two years after the SIMPLE IRA is opened. After that, 10% early withdrawal applies before age 59 ½ unless exception applies.

  • Death
  • Disability
  • Medical expenses in excess of 7.5% of AGI
  • Health insurance premiums if unemployed for 12 consecutive weeks
  • Qualifying higher education expenses
  • Qualifying first time home purchase ($10,000 lifetime limit)
  • Qualified military reservist
  • Substantially equal payments made over life expectancy
Required WithdrawalsMust begin at age 70 ½.
Deadline to Set Up and Fund
  • Must establish by October 1 of the first plan year.
  • Salary Deferrals must be deposited within 30 days after the end of the month in which the amount would otherwise have been payable to the employees in cash.
  • Employer contribution may be made through the business’ tax filing due date plus extensions.
Commissions and FeesVaries by account and investment option.
Learn more about saving for retirement; contact a Wells Fargo financial professional today!
Wells Fargo Advisors1-877-493-4727
Investment and Insurance Products: Are Not insured by the FDIC or any other federal government agency - Are Not deposits of or guaranteed by the Bank or any Bank Affiliate - May Lose Value
Brokerage products and services including WellsTrade are offered through Wells Fargo Advisors. Wells Fargo Advisors is the trade name used by two separate registered broker-dealers: Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC, (Members SIPC), non-bank affiliates of Wells Fargo & Company.
Financial Advisors are registered representatives of Wells Fargo Advisors LLC, member SIPC, a non-bank affiliate of Wells Fargo & Company.
Wells Fargo Advisors, LLC (Member SIPC) does not provide tax or legal advice. Please see your tax and legal advisors to determine how this information may apply to your own situation.
Information published by Wells Fargo Bank, N.A., Wells Fargo Advisors, or one of its affiliates as part of this website is published in the United States and is intended only for persons in the United States.