Here’s the difference between a SIMPLE IRA and a traditional IRA.
SIMPLE IRA:
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Set up by small business owners for both their employees’ future retirement funds and their own.
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Contributions are made by both the employer and employee.
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The maximum contribution is adjusted annually for cost-of-living increases and is $16,000 for 2024.
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For 2024, the catch-up contribution limit for employees 50 and older is $3,500.
Traditional IRA:
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Set up by an individual.
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Contributions are made by an individual only.
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The maximum contribution is adjusted annually for cost-of-living increases and is $7,000 for 2024.
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For 2024, the catch-up contribution limit for employees 50 and older is $1,000.