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SIMPLE IRA
The SIMPLE IRA is ideal for self-employed individuals and
small business owners. The SIMPLE allows both employer and
employee contributions. The participant may contribute up
to $6,000 of deferred compensation, and the employer may match
up to 3% with a $6,000 cap--for a maximum of $12,000.
- Employee contributions avoid current income taxation.
- All contributions grow tax-deferred until withdrawn.
- You are 100% immediately vested.
- Withdrawals made before age 70½ are subject to
a 10% federal tax penalty.
- If you withdraw assets gradually, instead of as a lump
sum, your balance will continue to grow tax deferred.
- Employers must contribute at least 1% of your salary to
a SIMPLE account each year.
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