Discover a Savings Incentive Match Plan (SIMPLE) with GBC Bank
Your employees are more than just a part of your business—they’re the heart of it. At GBC Bank, we’re here to help you take care of your team with our SIMPLE IRA, a plan that makes saving for the future straightforward and rewarding for everyone involved.
What is a SIMPLE IRA?
Think of the SIMPLE IRA as a win-win for your business. It’s designed for small businesses with 100 or fewer employees, giving you an easy way to contribute to your employees’ retirement. They can save through salary deferrals, while you can support their efforts with matching contributions or a set contribution that shows you care about their future as much as they do.
How a Savings Incentive Match Plan Works
- Eligibility: Tailored for businesses with 100 or fewer employees who earned at least $5,000 last year.
- Contribution choices: Flexibility is key—match your employees’ contributions or provide a consistent contribution for all eligible staff.
- Deposit deadlines: Employee contributions need to be deposited within 30 days after the month they’re deducted, keeping things on track.
- Planning for tomorrow: After two years, employees can roll their SIMPLE IRA funds into a Traditional IRA, giving them options as their needs evolve.
Pros and Cons of a SIMPLE IRA
At GBC Bank, we know that the strength of your business lies in the strength of your team.
Pros:
- Simple to administer: Compared to other retirement plans, a SIMPLE IRA requires minimal paperwork and administrative effort.
- Immediate vesting: Employees are fully vested immediately, meaning they have complete ownership of all contributions made to their accounts.
- Tax benefits: Employers and employees can benefit from tax deductions
Cons:
- Lower contribution limits: The contribution limits for SIMPLE IRAs are generally lower compared to other retirement plans like a 401(k).
- Mandatory employer contributions: Employers must contribute to the plan, either through matching contributions or a fixed contribution, which can be a financial commitment.
- Early withdrawal penalties: Withdrawing funds within the first two years can result in a significant penalty, higher than the standard early withdrawal penalty for IRAs.
When you invest in your employees, you’re investing in the success of your business. At GBC Bank, we’re here to help you navigate your options and find the right retirement plan that fits your needs. Take the first step today—reach out to us to explore how a SIMPLE IRA can benefit your business and empower your employees.