Simple IRA Contribution Limits
A look at the world of Roth IRA limits and more investment details about these retirement plans.
Investing in the right type of IRA is going to be essential for everyone, as this is going to be where your money really comes from when you’re planning on retiring. What you’re going to find is that there are all sorts of different accounts, and one of the best is the SIMPLE type, which can be the best when you can find an employer that provides one. However, there are certain simple IRA contribution limits that you’ll have to obey, so you want to be careful about which type of contribution you make, or how you actually make your contributions. For that reason, you want to ensure that you know the rules, so that you can obey them, and ensure your account can become as fruitful as possible.
In choosing the right method of dealing with simple IRA contribution limits, you’ll find that you have a few options. However, before thinking about those options, you want to first realize what a simple account actually is. The term SIMPLE is actually an acronym for savings incentive match plans for employees. That means it’s an employer driven IRA, that’s almost like a 401K, as you’re able to contribute to the account, and your employer will be doing the same as well. What you’ll find is that there are a few simple IRA contribution limits that you have to obey however, so you can’t just put in as much money as you would like to put in.
In fact, there are two different types of simple IRA contribution limits, and you want to choose the system that fit’s the best for you. Because these are driven by both employees and employers, you’ll find that you want to choose the system that’s best for you, if you have that available. The employer has two main options, and that is to elect to pay a flat rate amount on your behalf, or to match every dollar that you save within reason. If the employer chooses to pay the flat rate, they’ll be setting aside two percent of your annual salary for you. But if they match your dollar amount, they have to do so up to three percent of your own salary.
What’s more, you want to choose on how you fulfill your simple IRA contribution limits, and there is the conscious payment method and the automatic one as well. Through the automatic type the money is actually just taken out of your salary automatically and stored in your IRA for you. But with the other type you’ll actually be taking the money out yourself, and putting it into the account. You want to choose the method that’s both the most convenient for you, but also the most logical for ensuring you save enough money to really plan for you retirement. You want to be sure you’re saving enough, otherwise not meeting your simple IRA contribution limits can really come back to haunt you in the future. You don’t want that to happen, so usually the automatic payment method is your best option.