The Truth About Personal Finance (Collection)

Truth 38. SIMPLE 401(k)

For small business owners who see the virtue and cost savings of simplicity, a SIMPLE 401(k) may be just what, if not the doctor, the accountant ordered. As with the SIMPLE IRA, the boldly lettered SIMPLE is not just descriptive of this type of retirement plan but also is an acronym for Savings Incentive Match Plan for Employees. Just as an aside, I think it would be a great job to be in charge of coming up with the acronyms for federal programs.

The SIMPLE 401(k) takes elements of the SIMPLE IRA and blends them with elements of a traditional 401(k) to come up with a simpler (no surprise), less costly version of a 401(k) plan. Similar to the SIMPLE IRA, the SIMPLE 401(k) is limited to companies that have ...