Savings Incentive Match Plan for Employees (SIMPLE IRA)

If you are a business owner with 100 employees or less, or a self-employed individual, a SIMPLE IRA provides convenient access to a tax-deferred retirement savings plan. The SIMPLE IRA encourages your employees to save for retirement through pre-tax salary contributions and allows you flexibility in how employer contributions can be made. Additional benefits include:

  • Easy to set-up and operate
  • Generally, low administrative costs
  • Tax-deferred employee contributions available through payroll deductions
  • Employer choice of matched or fixed percentage contributions
  • Potential tax deduction and/or tax credit for employers

Eligibility for Employers:

  • 100 or fewer employees who earned at least $5,000 in the previous calendar year AND
  • Do not offer any other employer-sponsored retirement plan

Eligibility for Employees:

  • Earned at least $5,000 from the employer in any two preceding years AND
  • Expect to earn at least $5,000 in the current year


  • Employers must contribute up to 3% in matching contributions or 2% in non-elective contributions.
  • Employees can contribute up to 100% of their workplace compensation, not to exceed $12,500 annually.


  • If you are over the age of 59½, all withdrawals are allowed without penalty, but will be subject to normal income taxes. Minimum required distributions start at age 70½.
  • Any withdrawals made while under the age of 59½, will be subject to a 10% penalty in addition to federal and state income taxes. Certain exceptions to the penalty fee may apply including death or disability, a first-time home purchase, medical costs or qualified education expenses.
  • If withdrawals are made in the first two years of plan participation, a 25% early withdrawal penalty may be assessed.

A variety of investment options are available for your Traditional IRA including:

  • First Citizens Bank1
    • FDIC insured CDs
    • FDIC insured money market accounts
  • First Citizens Investor Services2
    • Mutual funds
    • Stocks
    • Bonds
    • Annuities
    • Exchange Traded Funds (ETFs)
  • First Citizens Wealth Management2
    • Customized Asset Management Solution

A First Citizens Client Advisor will be happy to discuss options to create an investment strategy that will help you align your retirement savings goals.