In this episode, Jeff discusses:

• What is a SIMPLE IRA and how it works
• Employee matching contributions for 2022
• The pros and cons of SIMPLE IRA
• How to set up a SIMPLE IRA

Key Takeaways:

• SIMPLE IRAs (Savings Incentive Match PLan for Employees) may be the best retirement plan option for businesses with modest revenue as it allows employees and employers to make tax-deferred contributions to their retirement accounts.
• In 2022, you can contribute $14,000 or 100% of your self-employed income or corporate salary, and if you are taxed and set up as an S corporation, your employer will match your contribution by the lesser of 3% of your self-employed income or the amount of your elective deferral contribution.
• It’s important that you ask your tax professional and financial advisor first about the pros and cons of various types of pension plans, including SIMPLE IRAs, before adding one to your employee benefits package.
• Almost all major brokerage firms will set up your SIMPLE IRA for you with little or no fee, but you need to set it up by October 1 in order to make contributions in that year.

“SIMPLE IRAs are simple, so this is a simple way to put more money in your pocket and reduce your tax liability." —  Jeff Hockett

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