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SIMPLE IRA

Fidelity’s Savings Investment Match Plan for Employees (SIMPLE IRA) makes it easier for self-employed individuals and small businesses with 100 or fewer employees to offer tax-advantaged retirement plans.

Tax advantages	Employers: Employer contributions are deductible as business expenses. Participants: Tax-deferred growth potential Pretax contributions for participants
Eligibility	Employers: Must have 100 or fewer employees who earned at least $5,000 in the preceding year Cannot maintain any other employer-sponsored retirement plan Participants: Must have earned at least $5,000 from the employer in any two preceding years Must be expected to earn at least $5,000 in the current year¹
Contributions	Funded by employer contributions and elective employee salary deferrals Plan Sponsors: Mandatory 3% matching contribution or 2% non-elective contribution Participants: Up to 100% of compensation, with a maximum of $12,500 for 2016 and 2017 ($15,500 if age 50 or older)
Establishment deadline	For current tax year: Set up and notify employees by October 1.²
Administrative responsibilities	Certain annual employee notifications must be made. No plan tax filings with the IRS are required.
Withdrawals	Minimum required distributions starting at age 70½ 10% early withdrawal penalty (25% for first two years of plan participation) if under age 59½, subject to certain exceptions
Investment options	Include a wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs Only certain fund families have mutual funds that are eligible investments for SIMPLE IRAs with no minimum initial investment requirement.
Support and guidance	One-on-one guidance—in person, online, or over the phone Research and tools to help you create a long-term plan and choose investments
Fees	$350 per plan³ collected annually from the employer; or $25 per participant³ collected annually from participants' accounts