How Do You Determine A Simple IRA Contribution Amount?
The Savings Incentive Match Plan for Employees (SIMPLE) IRA is a retirement savings vehicle available to smaller companies typically with less than 100 employees. The IRS annually sets a maximum amount that participants may contribute to their SIMPLE IRA. In addition to participant’s contributions, employers must elect to give eligible employees either a nonelective contribution or a matching contribution. Visit the IRS website to get the most up-to-date maximum elective deferral limits set by the IRS for SIMPLE IRAs. Per IRS regulations, employees may contribute elective deferrals up to the set limit of 100 percent of their compensation, with the maximum being $10,500 for 2007 and 2008. However, these limits can be increased annually. Decide on an amount of money you can comfortably afford to defer into your SIMPLE IRA without going over the maximum limit set by the IRA. Determine if you qualify for the catch-up contribution to your SIMPLE IRA. As defined by the IRS, employees who are
