The Basics of A SIMPLE IRA
The Savings Incentive Match Plan for Employees (SIMPLE) IRA is an IRA-based plan that gives employers an easy way to make contributions toward their employees' retirement. This is a popular plan for smaller companies, 100 employees or less. Any SIMPLE IRA can acquire "alternative" assets as long as the account is with a provider like New Direction IRA that services those assets.
Funding Your SIMPLE IRA
Self Directed SIMPLE IRAs are funded by an account holder making a contribution, an employer making a contribution, and/or the account holder transferring funds from another SIMPLE IRA.
The employer chooses to either match up to 3% of each employee's compensation, or contribute 2% for each eligible employee, whether the employee contributes or not. Employer contributions are deductible as a business expense.
Employees are not required to contribute in any given year.
Once a SIMPLE IRA has been in existence for 2 years, the account holder is eligible to rollover the SIMPLE IRA into a number of other retirement account types.