![]() An IRA allows individuals to contribute pre-tax money to the account, and get an immediate tax break. If you have an earned income in the tax year, you can open a traditional IRA account and contribute to retirement. The employer can match employee contributions at the rate of 1% to 3% of salary, or make a flat contribution of 2% of each employee’s salary. Unlike a traditional IRA that is funded by the account owner only, a SIMPLE IRA receives contributions from both the employer and the employee. Once you reach 72, you must take the required minimum distributions (RMDs) from the SIMPLE IRA. The money will grow tax-deferred, and you will only pay tax when you take a distribution from the account. ![]() This means you won’t pay tax when you contribute to the account. One of these similarities is that account holders can make pre-tax contributions to their retirement account. Employers may be eligible to participate in the SIMPLE IRA if they earned at least $5,000 during the last two years, and expect to make a similar amount or more in the current year.Ī SIMPLE IRA shares certain similarities with a traditional IRA. This retirement plan is available to small businesses with up to 100 employees. SIMPLE IRA ExplainedĪ SIMPLE IRA is set up by small business owners to help both the employer and the employees save for retirement. However, a SIMPLE IRA is funded by both employer and employee contributions, while a traditional IRA is only funded by the account owner’s contributions. Both SIMPLE IRA and traditional IRA allow retirement savers to contribute pre-tax money to their retirement account. Both retirement plans allow retirement savers to defer paying taxes on retirement contributions and investment earnings, but certain differences set them apart.Ī SIMPLE IRA is not the same as a traditional IRA, but both retirement plans have certain similarities and differences. The OregonSaves mark and OregonSaves logo are registered trademarks of the Oregon Retirement Savings Board and may not be used without permission.If you are self-employed, you have several retirement plans to choose from, including a SIMPLE IRA and a traditional IRA. All OregonSaves social media activities are the sole responsibility of the Board. Sumday, the program administrator for OregonSaves, does not monitor or endorse the Board's social media activities. You should consult your tax or financial advisor if you have questions related to taxes or investments.īy clicking on one of the social media icons, you are leaving the OregonSaves website, maintained by Sumday and are being redirected to a social media site solely maintained by the Oregon Retirement Savings Board (“Board”). Contributing to an OregonSaves Roth IRA through payroll deduction offers some tax benefits and consequences. Roth IRAs are not exclusive to OregonSaves and can be obtained outside of the program and contributed to outside of payroll deduction. Employer facilitation of OregonSaves should not be considered an endorsement or recommendation by your employer of OregonSaves, Roth IRAs, or these investments. Saving through a Roth IRA will not be appropriate for all individuals. OregonSaves is a completely voluntary retirement program. ![]() For more information on OregonSaves’ Portfolios go to Account balances in OregonSaves will vary with market conditions and are not guaranteed or insured by the Oregon Retirement Savings Board, the State of Oregon, the Federal Deposit Insurance Corporation ("FDIC") or any other organization. Participants saving through OregonSaves beneficially own and have control over their Roth IRAs, as provided in the program offering set out at OregonSaves’ Portfolios offer investment options selected by the Oregon Retirement Savings Board. ![]() Sumday and its affiliates are responsible for day-to-day program operations. Vestwell State Savings, LLC, dba Sumday Administration (“Sumday”), is the program administrator. OregonSaves is overseen by the Oregon Retirement Savings Board.
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