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How is a SIMPLE IRA different from a 401(k) plan?

Here’s how a SIMPLE IRA plan differs from a 401(k) plan.

SIMPLE IRA:

• Designed for a small business with 100 or fewer employees.

• Contribution limits are low compared to the 401(k) plan.

• Does not require any filing with the IRS.

• The cost to set up and manage SIMPLE IRA is low.

401(k) Plan

• Offered by any type of employer.

• Contribution limits are high.

• Requires filing with the IRS.

• The cost to set up and manage 401(k) is relatively high.