Types of IRA Retirement Plans

Individual Retirement Accounts (IRAs) are a popular way for people to save for their retirement, allowing them to defer the tax on their investment until after they have retired. While it’s common for individuals to set up their own IRAs, they can also be used by businesses to offer their employees as part of their benefits plan.

• Costs for IRA retirement plans
• What other companies are looking for

IRA retirement plans

One of the advantages of choosing an IRA-based plan is that they are relatively easy and inexpensive to set up and maintain. Most of them don’t require any additional returns or testing like 401k plans, which makes them a popular option for a lot of small businesses. There are three different types of IRA retirement plans:

SEP IRAs:The Simplified Employee Pension IRA allows a business to make contributions into all of their employees' traditional retirement accounts. Only the employer makes contributions with this type of plan, which can be up to 25% of the employee’s earnings, and the company can change the amount it contributes each year. Choosing this type of plan will mean that any employee over 21, who has been working for the company for at least 3 years out of the last 5 and earns more than $550, must be included.

SIMPLE IRAs:The SIMPLE IRA is designed for small businesses, and you must have less than 100 employees in order to implement this type of retirement plan. It will need to be offered to all workers who are earning over $5000, with employees currently being able to contribute up to $11,500 into the plan each year. Your business will need to contribute to each qualifying individual’s retirement plan, and this may be as much as 3% of the employee’s overall compensation.

Payroll Deduction IRA:This is one of the simplest IRA-based plans to implement, offering small businesses a lot more flexibility as there are no requirements with regards to eligibility, which means it can be offered to any employee. Your business isn’t required to make a contribution to the plan, and each worker can invest up to $5000 per year.

Other options

A popular alternative to the IRA retirement plans is the 401k program, along with the 403b plan that’s intended for employees of public schools and tax-exempt organizations. To discover whether these might be more appropriate for your business, as well as understand what is a standard 401k and what is a Roth 401k, it’s a good idea to look at the different options in more detail and make a thorough comparison.

Prices paid for ira retirement plans

$1,500 set-up plan and able to integrate with Paychex payroll.

- Buyer from Tulsa, OK

None. Free set up and no monthly fees through Fidelity.

- Buyer from Fairview, NJ

Set up fee was waived, $145 monthly fee.

- Buyer from San Francisco, CA

What others are looking for...

Need automatic contributions from our bank into the 401k plan. Employees should be able to control their own investments. It should be possible to set up automatic investments into funds of their choice when new money comes into the account.

- Healthcare Industry, Rancho Santa Margarita, CA

Not sure exactly what we are looking for yet, would like to hear options for 401k, and other different types of IRAs.We may or may not have an employer match.We are looking for plans to present to the board of directors with pricing.

- Business Services, Blytheville, AR

We have three employers (partners), one full-time W2 employee and one part-time W2 employee. We'd like to make the plan available to all, and not have any matching or non-discrimination requirement.

- Legal Firm, Mountain View, CA

I would like for you to get back to me ASAP with plan options and price quotes. Thanks!

- Cleaning Services, Cleveland, OH

We are a small 501c6 nonprofit and are looking to start a SIMPLE IRA. We'd prefer guidance, especially for the employees.

- Non-Profit, Arlington, VA

Just exploring options, none of our employee's have ever had a 401(k) nor a simple IRA before and I need to give them options to determine how many would be interested.

- Non-Profit, Waldorf, MD

We have an existing sep ira but are interested in learning about other options.

- Healthcare, Boca Raton, FL