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Investment FAQS

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SIMPLE stands for Savings Incentive Match Plan for Employees. It’s a payroll deduction plan that permits an employee to make pre-tax salary deferral contributions in addition to the employer’s contribution.

Key Benefits of a SIMPLE IRA Plan:

  • Inexpensive 401(k)-type plan for the small business owner.
  • No 401(k)-type discrimination testing.
  • Deductible employer contributions are made directly to employees’ IRAs.
  • Employer has the flexibility to choose between two contribution options.
  • Employer contributions are mandatory.
  • All contributions must be 100% immediately vested.

Who Can Establish:

  • Self-employed Persons
  • Partnerships
  • S-corporations
  • C-corporations
  • Non-profit, Tax-exempt, and Governmental entities with 100 or fewer employees. Generally, the employer may not maintain another plan.

Annual Contributions:

  • Who contributes: employee and employer.
  • Employees can defer up to: $11,500 ($14,000 if age 50 or older).
  • Employer must choose one of two options:
  • Match employee’s contribution dollar for dollar, up to 3% of compensation (not exceeding $11,500 or $14,000 if age 50 or older). In two years of any five year period, the match can be reduced to 1% of compensation.
  • Contribute 2% of each eligible employee’s compensation (compensation is limited to $205,000.)

SIMPLE IRA Candidates:

  • An employer who wants a retirement plan that is easy to establish and maintain and has minimal costs.
  • Employers that may not be able to afford the costs of maintaining a Profit Sharing or 401(k).
  • An employer who wishes to establish a plan where there is an employee contribution component.
  • Self-employed individuals who could defer a larger percentage of their compensation inside a Simple IRA vs. a SEP due to the Simple flat dollar contribution limit.

Contact a LPL Investment Consultant to go over your options for retirement.

Financial Advisors of LPL Financial are Registered Representatives with, and Securities, Advisory Services and Insurance Products are offered through LPL Financial and its affiliates, Member FINRA/SIPC. LPL Financial is not a registered broker/dealer. Investments are: Not FDIC insured, may lose value, are not bank guaranteed, and are not obligations of LPL Financial. LPL Branch Office located at 1311 Carolina Ave, Washington, North Carolina 27889. Investment Advisory Services offered through LPL Financial, a SEC Registered Investment Advisor


This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial U.S. registered representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.


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