SIMPLE 401(k)s are employer sponsored retirement plans available to small businesses with 100 or fewer employees. As the name implies, it is a hybrid plan that shares ease of management, low cost, and lack of discrimination testing requirements like SIMPLE IRAs with the availability of a loan feature found in a 401(k).
- Both employer and employee can contribute
- Employer must make either a 2% non-elective or a 3% matching contribution
- Employees are always 100% vested
- Penalty free distributions after 59 ½
- Required minimum distributions begin by 70 ½
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