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KEY POINTS:
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00:00 Simple IRA Advantages And Disadvantages
00:29 Flexibility
00:49 Simple
01:06 Tax Benefits
01:21 No Roth IRA Options
01:35 Lower Contributions
01:48 High Withdrawal Fees

The simple IRA, stands for Savings Incentive Match PLan for Employees.

It's for small business owners with less than 100 employees.

It allows them to save for their own retirement.

And help contribute to their employees retirement too.

Employers will contribute either 3% match or 2% of your salary each month.

Here are the main advantages of a simple IRA.

#1 - Flexibility.

Unlike a 401(k), the money you get is immediately yours.

You don't have to wait years before you can claim it.

Plus you have more investment options to choose from too.

So it's more flexible than a 401(k).

#2 - It's simple.

As the name suggests, a simple IRA is easier and cheaper to operate.

The administration fees are lower and less regulations are involved.

Which is a huge bonus for both employers and employees.

#3 - Tax benefits.

Employers can get a tax deduction for the contributions they make.

Taking away some stress when that time arrives!

And here are the main disadvantages of a simple IRA.

#1 - No Roth IRA options.

There are no options for a Roth IRA.

Which means you must pay tax on withdrawals.

#2 - Lower contributions.

Unlike a 401(k), the maximum contribution limit is $15,500.

Which is less than with a 401(k).

But you can also invest into other savings plans at the same time.

#3 - High withdrawal fees.

If you withdraw during the first 2 years, you pay a 25% penalty.

And the same if you rollover into a different type of IRA plan too.

So only put money in that you know you won't be needing soon.

Thanks again for watching this video on simple IRA advantages and disadvantages.

#simpleiraadvantagesanddisadvantages #simpleira #ira

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