A Complex Mess: Simple IRA Maximum Contributions 2026 and Beyond
Prior to 2025, it was very easy to explain to an employee what the maximum Simple IRA contribution was for that tax year. Starting in 2025, it will be anything but “Simple”. Thanks to the graduation implementation of the Secure Act 2.0, there are 4 different limits for Simple IRA employee deferrals that both employees and companies will need to be aware of.
Mandatory Roth Catch-up Contributions for High Wage Earners - Secure Act 2.0
Starting in 2026, individuals that make over $145,000 in wages will no longer be able to make pre-tax catch-up contributions to their employer-sponsored retirement plan. Instead, they will be forced to make catch-up contributions in Roth dollars which means that they will no longer receive a tax deduction for those contributions.
Secure Act 2.0: Roth Simple IRA Contributions Beginning in 2023
With the passage of the Secure Act 2.0, for the first time ever, starting in 2023, taxpayers will be allowed to make ROTH contributions to Simple IRAs. Prior to 2023, only pre-tax contributions were allowed to be made to Simple IRA plans.
How Does A Simple IRA Plan Work?
Not every company with employees should have a 401(k) plan. In many cases, a Simple IRA plan may be the best fit for a small business. These plans carry the following benefits
