SIMPLE IRA contribution limits for 2023 | Fidelity (2024)

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Key takeaways SIMPLE IRA contribution limits for 2023 SIMPLE IRA contribution limits for 2024 SIMPLE IRA employer contribution limits for 2023 Who's eligible to contribute to a SIMPLE IRA? SIMPLE IRA FAQs No 401(k) through work? More to explore See how you're doing How much do I need to retire? Looking for more ideas and insights? Thanks for subscribing! We're on our way, but not quite there yet Oh, hello again! Thanks for subscribing to Looking for more ideas and insights? You might like these too: Fidelity Viewpoints® Decode Crypto Fidelity Smart Money℠ Active Investor Insights from Fidelity Wealth Management ℠ Women Talk Money Educational Webinars and Events FAQs

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SIMPLE IRA contribution limits for 2023 | Fidelity (1)

Key takeaways

  • The most employees can contribute to SIMPLE IRAs in 2023 is $15,500, with an additional $3,500 catch-up contribution for those age 50 and older.
  • In 2024, the SIMPLE IRA employee contribution limit increases to $16,000, with an additional $3,500 catch-up contribution for those age 50 and older.
  • Employers may contribute either a flat 2% of your pay, regardless of whether you contribute, or match dollar-for-dollar what you contribute, up to 3% of your pay.

A Savings Incentive Match Plan for Employees (SIMPLE) individual retirement account (IRA) helps small-business owners offer retirement benefits to themselves and their employees. As with other retirement plans, SIMPLE IRAs come with tax benefits, as well as contribution limits governing the amount of money you can add to the account each year.

SIMPLE IRA contribution limits for 2023

The SIMPLE IRA contribution limit for 2023 is $15,500. Those 50 or older can save an additional $3,500 as a "catch-up contribution."

If you also contribute to other employer-sponsored retirement plans, such as a 401(k) or 403(b), the total you can save as an employee across all of those plans is $22,500, or $30,000 if you're age 50 or over. (Sound familiar? This is equal to the maximum you can contribute to a 401(k).)

But that's only half of the SIMPLE IRA contribution limit equation. SIMPLE IRAs also have a separate contribution limit for employers. This is particularly important to keep in mind if you've opened a SIMPLE IRA as a self-employed person or as an owner-employee of a small business, as you can contribute up to the maximum for each type of contribution.

Note: Starting in 2024, a provision from SECURE 2.0 will go into effect that allows employees to contribute an additional 10% on top of the existing limits, so long as their employer has less than 25 employees or has 26 to 100 employees and agrees to a 4% employer match or 3% nonelective contribution.

SIMPLE IRA contribution limits for 2024

The SIMPLE IRA contribution limit for 2024 is $16,000. Those 50 or older can save an additional $3,500 as a "catch-up contribution."

If you also contribute to other employer-sponsored retirement plans, such as a 401(k) or 403(b), the total you can save as an employee across all of those plans in 2024 is $23,000, or $30,500 if you're age 50 or over.

SIMPLE IRA employer contribution limits for 2023

Employer contributions to SIMPLE IRAs generally follow one of 2 formulas. Employers can either:

  • Contribute a dollar for each dollar you contribute, up to a max of 3% of your compensation. Typically, employers must perform this match for 3% of your compensation, provided you contribute at least this amount yourself. However, they can choose to reduce their match rate to less than 3% (provided it's at least 1%) for up to 2 out of every 5 years.
  • Contribute 2% of your compensation (up to maximum salary of $330,000), no matter what you contribute.Employer contributions do not impact what you as an employee can defer from your pay as a SIMPLE IRA contribution. And it's important to note that whatever the employer does for one employee (including for themselves as the owner) they must do for all employees.

Note: Starting in 2024, a provision from SECURE 2.0 will go into effect that allows the employer to make an additional 10% nonelective contribution to each eligible employee in a uniform manner, to a max of $5,000.

Who's eligible to contribute to a SIMPLE IRA?

If your employer offers a SIMPLE IRA, you can generally contribute if you satisfy both of these requirements:

  • You earned at least $5,000 either of the last 2 years from the employer sponsoring your SIMPLE IRA.
  • You expect you will earn at least $5,000 from them this current year.

Your company may choose to adopt a plan with less restrictive income-eligibility requirements. You may meet the above criteria, but be ineligible to contribute if:

  • You are covered by retirement benefits as part of a collective bargaining agreement.
  • You are a not a US resident and received no US-sourced earned income.

SIMPLE IRA FAQs

What is the deadline for SIMPLE IRA contributions?
For employees, the SIMPLE IRA contributions should be made no later than 30 days after the end of the month in which they are deferred. So if you defer your April pay, the very latest to contribute those funds to your account is May 30.

What companies can offer SIMPLE IRAs?
For a company to offer a SIMPLE IRA, they must have under 100 employees and cannot have other employer-sponsored retirement savings plans. Those who are self-employed may also open SIMPLE IRAs on their own.

Are contributions to a SIMPLE IRA made pre-tax?
Employee contributions are pre-tax through payroll deductions. This means funds were withdrawn before income taxes had been applied. Contributions and earnings then grow tax-free as long as they remain in the account, and then withdrawals are taxed in retirement.

No 401(k) through work?

If you're self-employed or own a small business, consider a SIMPLE IRA from Fidelity.

Learn more

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SIMPLE IRA contribution limits for 2023 | Fidelity (2024)

FAQs

SIMPLE IRA contribution limits for 2023 | Fidelity? ›

Key takeaways. The most employees can contribute to SIMPLE IRAs in 2023 is $15,500, with an additional $3,500 catch-up contribution for those age 50 and older. In 2024, the SIMPLE IRA employee contribution limit increases to $16,000, with an additional $3,500 catch-up contribution for those age 50 and older.

Read More ›
Will SIMPLE IRA contribution limits increase in 2023? ›

Key takeaways. The most employees can contribute to SIMPLE IRAs in 2023 is $15,500, with an additional $3,500 catch-up contribution for those age 50 and older. In 2024, the SIMPLE IRA employee contribution limit increases to $16,000, with an additional $3,500 catch-up contribution for those age 50 and older.

View Details ›
How much can I contribute to a single IRA in 2023? ›

For 2023, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than: $6,500 ($7,500 if you're age 50 or older), or. If less, your taxable compensation for the year.

View More ›
What is the maximum contribution to Fidelity SIMPLE IRA for 2023? ›

Employers have until the due date of their business tax return for tax year 2023—including extensions—to make matching or nonelective contributions. The maximum SIMPLE IRA employee contribution for 2023 is $15,500, plus an additional $3,500 for those 50 and older.

Learn More ›
What is the maximum SIMPLE IRA contribution for 2024 for over 50? ›

For 2024, the annual contribution limit for SIMPLE IRAs is $16,000, up from $15,500 in 2023. Workers age 50 or older can make additional catch-up contributions of $3,500, for a total of $19,500. The contribution limits are the same if you're self-employed.

View Details ›
What are the rules for SIMPLE IRA contributions? ›

SIMPLE IRA contribution limits for 2024
  • Provide matching contributions up to 3% of the employee's pay, not limited by any annual compensation limit.
  • Make nonelective contributions equal to 2% of the employee's compensation based on a maximum salary of $345,000 in 2024.
Apr 17, 2024

Get More Info ›
What is the 2 year rule for SIMPLE IRAs? ›

After the 2-year period, you can make tax-free rollovers from SIMPLE IRAs to other types of non-Roth IRAs, or to an employer-sponsored retirement plan. You can also roll over money into a Roth IRA after the 2-year period, but must include any untaxed money rolled over in your income.

Tell Me More ›
What is the maximum contribution to the IRS in 2023? ›

The basic limit on elective deferrals is $23,000 in 2024, $22,500 in 2023, $20,500 in 2022, $19,500 in 2020 and 2021, and $19,000 in 2019, or 100% of the employee's compensation, whichever is less.

Get More Info Here ›
What is the deadline for 2023 IRA contribution? ›

For 2023, taxpayers began making contributions toward that tax year's limit as of Jan. 1, 2023. This deadline expires when 2023 taxes are due on April 15, 2024.

Find Out More ›
Can I contribute to an IRA if I make over 200k? ›

No, there is no maximum traditional IRA income limit. Anyone can contribute to a traditional IRA. While a Roth IRA has a strict income limit and those with earnings above it cannot contribute at all, no such rule applies to a traditional IRA.

Read On ›

Can I change my SIMPLE IRA contribution at any time? ›

Annual Election Period: Each year employees can change their contribution levels during the plan's election period. This election period must be at least 60 days long, and employees must receive prior notice about an upcoming election opportunity.

Tell Me More ›
Can you have two SIMPLE IRAs? ›

This may be the same type of plan, such as two SIMPLE IRAs, or different options, such as a 401(k) and a SIMPLE IRA. If you work for more than one employer, and your employers aren't related to each other in any way, then it's possible for you to contribute to more than one SIMPLE IRA at one time.

Read On ›
What is the 3% match for SIMPLE IRA? ›

The maximum matching contribution is always 3% of the employees' compensation for the entire calendar year. Matching contributions may be made on a per-pay-period basis, or by the due date of the employer's tax return (including extensions).

Find Out More ›
What is the maximum SIMPLE IRA contribution by year? ›

The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $16,000 in 2024 ($15,500 in 2023; $14,000 in 2022; $13,500 in 2020 and 2021; $13,000 in 2019 and $12,500 in 2015 – 2018).

Keep Reading ›
What is the SIMPLE IRA limit for 2025? ›

Beginning in 2025, the catch-up contribution limit for SIMPLE 401(k) and SIMPLE IRA owners age 60, 61, 62, and 63 will increase to the greater of $5,000 or 150 percent of the catch-up amount, indexed for inflation.

Explore More ›
Are employers required to match SIMPLE IRA contributions? ›

Businesses must match employee contributions up to a certain percentage. This is in contrast to a retirement plan such as a 401(k), where employer contributions aren't required. Employers must follow strict rules set by the IRS, including rules around withdrawals and transfers (see SIMPLE IRA rules section above).

Read The Full Story ›
What is the simple 401k contribution limit for 2023? ›

Contribution limits

Employee - $15,500 in 2023, $14,000 in 2022 and $13,500 in 2020 and 2021. If the employee is age 50 and over, an additional “catch-up” contribution is allowed. The additional contribution amount is $3,500 in 2023 ($3,000 in 2022, 2021, and 2020).

Learn More ›
Will IRA limits increase in 2024? ›

The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.

Explore More ›
Can I max out a SIMPLE IRA and a traditional IRA in the same year? ›

Can You Max Out a Traditional and SIMPLE IRA the Same Year? While you cannot max out a SIMPLE IRA and another employer-sponsored retirement plan like a 401(k), you can max out both a Traditional IRA and a SIMPLE IRA.

Learn More ›
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