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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

  • Writer's pictureClay Reynolds

A Breakdown of SIMPLE IRAs

SIMPLE IRAs are often mentioned when talking to clients. They either have one with a previous employer or want to know if they would benefit from opening one themselves. SIMPLE IRAs have unique characteristics and rules. Educating yourself on these rules will give you a better understanding of what a SIMPLE IRA is and who it is for.

 

What is a SIMPLE IRA?

A SIMPLE IRA is a low-cost plan for self-employed or small business owners that is low-cost and easy to maintain.

 

Who is it for?

SIMPLE IRAs are for self-employed individuals or businesses with 100 or fewer employees. A caveat is that it must be the only retirement plan you fund. If you already have an existing employee retirement fund, you are not eligible to establish a SIMPLE IRA.

 

Who is eligible?

All employees who have received at least $5,000 in compensation in any of the two prior years or are expected to receive (at least) $5,000 in the current calendar year.

Side Note: You can impose or eliminate less restrictive eligibility requirements for prior year compensation.

 

How is it funded?

SIMPLE IRAs are funded with salary-deducted contributions and annual employer contributions. Eligible employees can decide whether to contribute/participate, but employer contributions are mandatory. 

 

Contribution Limits (2024)

Eligible employees may contribute 100% of their compensation or a maximum of $16,000. If they are 50 or older, that amount is increased to $19,500.

 

Administering Information

SIMPLE IRAs must be established by October 1st if you will make contributions for that same year. Annual employer contributions must be made by the employer’s tax filing deadline. In addition, plan vesting is immediate, and employer contributions are tax-deductible.

 

Early Withdrawal Penalties

Withdrawing from your SIMPLE IRA will result in income tax paid. However, additional penalties may be paid depending on your age and time in the plan.

If you withdraw any amount before age 59 ½, you will be charged an additional tax of 10%. This tax increases to 25% if you withdraw within 2 years of first starting to participate in the plan.

 

Are they right for you?

SIMPLE IRAs have more intricacies than the ones listed, but hopefully, the broad overview of SIMPLE IRAs has helped you understand their purpose and function better. If you think you or your business would benefit from setting up a SIMPLE IRA, reach out to your advisor. If you don’t have an advisor, Whitaker-Myers Wealth Managers has a team of financial advisors with the heart of a teacher able to help explain and answer questions you may have. Schedule a meeting with one, as they can assess your situation personally.

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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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