SIMPLE IRA
The SIMPLE IRA: who may offer it, the 2026 limits, the employer's 3% match or 2% contribution, and the October 1 deadline.
A SIMPLE IRA is the lightest plan there is: available to an employer with generally 100 or fewer employees, it lets employees defer up to $17,000 for 2026 into their own IRAs, and requires the employer to either match up to 3% of pay or give 2% to every eligible employee. The employer cannot have any other retirement plan, and a new plan can be made effective any day from January 1 through October 1.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Background reading explains; it is never the authority for a rule. Anything marked as a convention is ours, not the rule-maker's.
- IRS guidance
- IRS — SIMPLE IRA plan (opens in a new tab)SIMPLE IRA plans for employers with 100 or fewer employeesFree to read
- Notice 2025-67 (opens in a new tab)2026 retirement plan limitsPDF · Free to read
- Background reading — not an authority
- Wikipedia, “SIMPLE IRA” (opens in a new tab)SIMPLE IRAFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- SIMPLE IRAA retirement plan for employers with 100 or fewer employees and no other plan: employees defer up to $17,000 for 2026 into their own IRAs, and the employer matches up to 3% of pay or gives 2% to everyone eligible. Set up effective by October 1 of a year
- Elective deferralThe part of pay an employee chooses to put into a 401(k), 403(b) or SIMPLE plan instead of taking it as cash. Traditional deferrals are out of income-tax wages but stay in FICA wages