SIMPLE IRA VS SEP IRA VS 401(k)

Here is a highlight of the significant differences between each retirement plan

ITEM SIMPLE IRA SEP IRA 401 (K)

Employer only; and must

Employee and Employer/optional
Contributions contribute for all eligible
A

Employer for Employees

employees.

Limited to 25% of total Limited to 25% of total

Employer annual compensation for annual benefit for the
$13,000
B

Contribution the employee or $56,000 employee or $56,000 Cap.

Cap. Plus profit sharing options.

$13,000, additional $19,000, additional

$3,000 catch-up for Employees are not allowed $6,000 catch-up for
Maximum Employees
C

employees above to contribute employees above

Contibution
50 years of age 50 years of age

Source: https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans
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