SIMPLE IRA –SIMPLE stands for Savings Incentive Match Plan for Employees. It is a tax-qualified retirement plan for businesses with fewer than 100 employees. It enables a business to offer 401(k)-type benefits without all of the complicated rules or high administrative expenses. Employees can make salary deducted contributions to lower their current taxable income.
SEP IRA – SEP stands for Simplified Employee Pension. It is a retirement plan that is easy to set up and administer because paperwork is minimal and there is no annual reporting to the IRS. A SEP IRA is great for small businesses and self-employed people. Contributions are fully tax-deductible and the limits on them are generous. All contributions are employer provided.
Employer-sponsored IRA contributions are generally tax deductible and are subject to IRS eligibility and guidelines.
For more information on retirement planning options from Erie Family Life or to schedule an appointment, contact your local ERIE agent today. Our agents can help you select a plan that will work for your budget and situation.2