Millennium Trust offers two types of employer sponsored IRAs: the SEP IRA, and the SIMPLE IRA. Small-business owners should consider their IRA choices carefully to determine which makes the most sense for their business and employees.
Simplified Employee Pension, or SEP - The SEP IRA allows employers to make contributions to their employees' retirement accounts of up to 25 percent of the employee's compensation, or $42,000, whichever is less. As their personal contribution, the employee may contribute the smaller of $4,000 or 100 percent of their compensation to the SEP IRA annually.
Savings Incentive Match Plan for Employees, or SIMPLE - The SIMPLE IRA enables employers with fewer than 100 employees to establish an individual retirement account for each participating employee. The SIMPLE IRA has requirements similar to a Traditional IRA, however individual contribution limits are higher. The employer can match all or a part of the employee's contribution.
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