Simple IRA Plan

Choose A Simple IRA Plan

If your company offers a SIMPLE IRA and you want to know if you can add other investments like physical precious metals, this article can provide the right information. In terms of a SIMPLE IRA, the “simple” in this term stands for Savings Incentive Match Plan for Employees.

This type of IRA isn’t usually offered when it comes to retirement plans. It is a combination of a regular IRA and a retirement plan that is offered by employers. This article is going to talk about what a SIMPLE IRA is, how it is different from a regular IRA and how it is similar to other IRAs. You will also get information about precious metal investments. In addition, this article will discuss how you can protect your retirement assets when it comes to economic disasters such as stock market and currency collapses.

What is a Simple IRA?

A Simple IRA is a tax deferred method that allows you to save for retirement. It is not an uncommon method of saving for retirement that is offered by employers. This type of retirement plan was created for companies that have fewer than 100 employees. Also, it is supposed to be much easier to setup than many other retirement packages. This is because a Simple IRA does not have to adhere to the rules of the ERISA, which means that it does cost a lot of money or paperwork to setup.

If a company offers Simple IRA plans, it has to contribute a minimum amount to its employees’ accounts. Either a match program for a minimum of 3 percent of employee dollars is setup, or the company has to contribute a flat rate of 2% of every employee’s income.

Similar to what happens when an employee opens an SEP IRA, an employee is basically setting up a regular IRA with his employer when opting for a Simple IRA; however, that the employee could set up a 401k plan via a Simple IRA as well.

One of the main differences between a 401k and a Simple IRA is that the contribution limits for a Simple IRA are not as high. A SIMPLE IRA has limits as low as $12,500, which is lower than the average 401k or other types of retirement plans that employers offer. In addition, setting up a Simple IRA is more complicated. After an employee’s SIMPLE IRA is established, assets held in the SIMPLE IRA must not be transferred or rolled to another retirement plan during the first two years.  The two-year waiting period does not apply to transfers or rollovers between two SIMPLE IRAs

Plan Type Sponsorship 2018 Contribution Limit Roth Option? Allow Gold Stocks? Allow Gold ETFs? Allow Gold Bullion
401(k) Private Employer $18,500 / $55,000 Yes Maybe Maybe No
Solo 401(k) Self-employed $18,500 / $55,000 Yes Yes Yes Yes
Keogh Plan Self-employed or Unincorporated Employer $55,000 No Maybe Maybe No
403(b) Government or Non-profit Employer $18,500 / $55,000 Yes Maybe Maybe No
457(b) Government or Tax-exempt Employer $18,500 / $55,000 Yes Maybe Maybe No
Simple IRA Private Employer $12,500 / $55,000 Yes Yes Yes Maybe
SEP IRA Business Owners & Self-employed $55,000 Yes Yes Yes Maybe
Profit Sharing Plan Private Employer $55,000 No Maybe No No
Money Purchase Plan Private Employer $55,000 No Maybe Maybe No
Annuity Individual None No Maybe Maybe No
ESOP Private Employer Varies Yes Maybe No No
SARSEP Private Employer $55,000 No Yes Yes Maybe
Self Directed IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Traditional IRA Individual $5,500 / $6,500 Yes Yes Yes No
Precious Metals IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Thrift Savings Plan (TSP) Government or Military $5,500 No No No No

Rollover Rules and Simple IRA Limitations

You can only transfer money in your Simple IRA to another Simple IRA during the first two years. This is considered to be a trustee to trustee transfer that is tax free, but if you make other types of transfers it might mean paying a 25% penalty in taxes. Keep in mind that this is usually just 10% for a regular tax-deferred plan. But, once the two year wait is over, it is possible to transfer to another type of IRA account. However it cannot be from a Roth to non-Roth account or the other way around.

There are other Simple IRA limitations as well. If you choose to rollover an amount, do not choose an indirect one over a direct one. Indirect rollovers have requirements for withholdings that could incur distribution penalties.

Gold Investments and a Simple IRA

Yes, there are Simple IRA limitations when it comes to the things that you can invest in. But they normally offer the following kinds of investments such as corporate or government bonds, individual stocks, mutual fund shares, real estate, CDs, ETF shares and precious metal bullion.

Investment options that similar to a SEP IRA and a traditional IRA. You can also use them to invest in commodities such as palladium, silver, gold or silver. This is one of the limited accounts where this is possible to do.

In addition, you can use a Simple IRA to invest in paper gold by purchasing the stock of various gold mining companies, EFTs that have mining companies or mutual funds that include mining company stock. This is the way to invest in gold indirectly.

A Paper Gold Investment vs. a Physical Gold Investment

Paper gold is the name that is given to the stocks of companies that look for, produce or mine gold. There are plenty of gold stocks available for selection. Some of these bigger companies are listed on gold indices such as GDX or HUI.

Owning physical gold is not as risky as owning gold stocks. This is mainly because when the spot price of gold goes up, gold stocks will appreciate very fast. If the spot price decreases, gold stocks will fall very quickly. Gold stocks are also unstable because of other risks such as cost of production risks, management risks, regulatory risks and Fiat currency risks. However, the price of physical gold has never dropped down to zero. As you can see, physical gold has been proven to have much more lasting value than paper gold.

historical gold price

Why it is Advantageous to Invest 5%-20% of Your Retirement Portfolio in Precious Metals

Investing gold is a safe and easy way to broaden your retirement portfolio. It is one of the best ways to provide protection for your assets against unstable economic conditions.

Gold is a very inexpensive investment, and it is always rising in value. As a matter of fact, a lot of people like it because it has plenty of growth potential, and the value will continue to go up.

The amount of precious metals that you invest in will be based upon how much risk you are willing to take and your plans for retirement. Setting up a self directed IRA is one of the simplest, easiest and overall smartest ways to have a broad retirement portfolio and get the best tax benefits when investing in precious metals.

On this site we have reviews of gold companies for you to investigate. Because this website that is independently owned, we don’t work for nor do we own any shares in, any gold IRA companies. We are however compensated by some of the companies we recommend. Our reviews are impartial and based on ratings and reports from reputable online sources like the BBB, BCA and Trustlink. Our top pick for 2015 is Regal Assets.

Rank Company BBB
(Rating A+ to F)
(Rating AAA to F)
TrustLink Storage & Admin Fees
#1 Regal Assets
0 Complaints
0 Complaints
(587 reviews) $250 per year
#2 Capital Gold Group
1 Complaint
10 complaints
(142 reviews) $250 per year
#3 Rosland Capital
7 Complaints
7 Complaints
(21 reviews) $225 per year
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