November 8, 2008
When Employers Can Make Contributions To A Simple IRA
If a small business wants to participate in a simple IRA retirement plan, the plan must be established by October 1 in order to make contributions for the current year. Otherwise, the company will have to wait until October 1 of the following year. The only time a plan can be established on January 1 is if a plan was already in place for the previous year. SIMPLE stands for Savings Incentive Match Plan for Employees, and is a written arrangement which simplifies the retirement income contributions employers wish to make for its employees. Employers can make contributions by matching an employee’s tax-deferred contribution or through a non-elective contribution.
