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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 2017 and 2018 ($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	Required minimum 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	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