Employer-sponsored retirement programs are fairly common at large companies. After all, things like pension plans or 401(k)s get easier to set up and administer when the company has a sizable employee base.
But what about smaller companies? What kind of retirement plan can you offer when you run a pet grooming business out of your van?
The Savings Incentive Match Plan for Employees of Small Employers (or SIMPLE, for short) represents one type of plan that small businesses can offer. It was created in the mid-1990s, replacing the older SARSEP programs. The program applies to companies with fewer than 100 employees. With it, the smaller firms get tax incentives to contribute to retirement plans for their employees (usually in the form of an IRA).
Typically, the employee contributes some amount, and the sponsor of the SIMPLE plan matches the contribution (up to a pre-set ceiling). However, the plan also calls for the employer to contribute a certain amount, even if an employee doesn't want to contribute her own money.
Related or Semi-related Video
Finance: What is a Savings Bond?2 Views
finance a la Shmoop what is a savings bond well it's kind of like charity
charity because interest rates on savings bonds are exceptionally low even
by government standards well there was an era in America when taxpayers happily
and willingly loaned money to Uncle Sam and were happy to do so because they had
great faith and trust that the people we elected were in fact decent honest [old government photos]
hard-working representatives who had the interests of the nation placed far ahead
of their own personal gain it was the era of Jimmy Stewart and a whole bunch [photo of Jimmy Stewart]
of others you should think the greatest generation yeah we know even a pretty [picture of John Wayne]
good generation check Congress for details so savings bonds used to be a
standard birthday present for young people kind of like the cross pin that [kid's birthday party]
nice Jewish boys would get at their bar mitzvahs grandmother's after slathering [boy's mar mitzvah]
in a bathtub of angry perfume loved handing the $50 savings bond envelope to [woman in hot bath]
their college-bound progeny well savings bonds are issued by the US
Treasury and have no stated maturity date instead what happens is that the
savings bond welljust pays the interest for some
period of time like say a decade and at the end of that 10 years while it simply
stops paying interest you can cash in the bond at that time or just let it
ride essentially renting money to the Gov for free and yeah you don't want to
confuse a savings bond with this bond yeah who needs no safety
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