Plans With IRAs

Payroll Deduction IRA

A Payroll Deduction IRA is the simplest of all retirement plans. It lets employees decide if and how much to contribute to the plan.

For information on setting up this plan for your business, visit Establishing a Payroll Deduction IRA on IRS.gov or consult a benefit plan advisor.

Payroll Deduction IRAs for Small Businesses (.pdf file)

 

 
  • Can be set up by any employer
  • Participant's retirement benefits based on participant’s account balance
  • Employees may contribute to their own retirement by payroll deduction, up to $5,5001 and an additional $1,000 if age 50 or older
  • Can cover all employees or selected employees
  • Easy to set up and operate
  • No annual return required by the employer for the plan
  • Annual nondiscrimination testing not required
  • Little design flexibility
  • Employees may not take loans from the plan
  • Employees may withdraw their balance at any time, subject to tax
  • Immediate vesting in full account balance
1Dollar limits are for 2013 and are subject to cost-of-living adjustments for future years.

Payroll Deduction IRA on IRS.gov

 

 

Operating a Payroll Deduction IRA on IRS.gov

 

 

 

ADDITIONAL RESOURCES