What Is a SIMPLE IRA?
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a US retirement plan for small employers, generally those with 100 or fewer employees. Employees can contribute through payroll, and the employer must either match contributions up to a set percentage or make a fixed contribution for all eligible employees.
Early Withdrawals
Withdrawals within the first two years of participation can face a 25% additional tax instead of the usual 10% penalty.
Compared With a 401(k)
SIMPLE IRAs cost less to administer but have lower contribution limits.
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.