Small business retirement


What is a SIMPLE-IRA?

A SIMPLE (Savings Incentive Match Plan for Employees) IRA is a retirement plan that allows employers and employees of small businesses to make tax-deferred contributions to the plan.

Who can participate?

Self-employed individuals, small-business owners, and any business with 100 or fewer employees that don't have another existing retirement plan.

Employer contribution limits

  • Option 1. Dollar-for-dollar match of employee contributions up to 3% of each employee's compensation (which can be reduced to as low as 1% in any 2 of 5 years).
  • Option 2. A contribution of 2% of each employee's compensation. The maximum compensation used to determine this contribution is $330,000 for 2023 and $345,000 for 2024. Contributions are tax-deductible and are required every year.
  • Beginning with tax year 2024, SECURE 2.0 allows an employer to make additional nonelective contributions to each employee of the plan in a uniform manner, provided that the contribution may not exceed the lesser of up to 10% of compensation or $5,000 (indexed for inflation). Employers are also permitted to treat student loan payments as elective deferrals for purposes of matching contributions.
  • SECURE 2.0 also allows employers of SIMPLE IRAs to offer the ability to make Roth contributions. At this time, Vanguard will not be offering this option.

Employee contribution limits

  • Employees can contribute up to $15,500 for the 2023 tax year and $16,000 for the 2024 tax year ($19,000 for the 2023 tax year and $19,500 for the 2024 tax year for employees age 50 or older).
  • Beginning with tax year 2024, for eligible employers with 25 or fewer employees, Secure 2.0 increases the annual employee contribution limit and the catch-up contribution at age 50 to 110% of the limits that would otherwise apply for that year. Eligible employers with 26 to 100 employees would be permitted to provide the higher limits, but only if the employer provides a 4% matching contribution or a 3% employer contribution.
    • An eligible employer is one who has not established or maintained a different qualified retirement plan during the 3 tax years preceding the first year of maintaining a SIMPLE IRA.

Investment choices

Participants can select from more than 100 Vanguard mutual funds, including many from our low-cost Admiral™ shares class. And there's no minimum initial investment.

Browse Vanguard's fund choices

What are Admiral Shares?

Who can use the plan?

  • There are no age restrictions. Employees are automatically eligible if they received at least $5,000 from the employer in any 2 preceding years and are expected to earn at least $5,000 in the current year.
  • An employer can choose less restrictive participation requirements. For example, an employer can expand the group of eligible employees by reducing or eliminating the minimum compensation requirement.
  • Employers must have 100 or fewer employees and cannot maintain any other employer sponsored retirement plan.

Refer to IRS Form 5305-SIMPLE for more details (PDF)

  • There's no fee to establish an account.
  • We charge $25 a year for each Vanguard fund in a SIMPLE IRA. We'll waive the fee if you have at least $50,000 in qualifying Vanguard assets.

See what Vanguard assets qualify

  • Certain employee notifications are required annually, but there are no IRS reporting rules.

  • All contributions to your SIMPLE IRA belong to you immediately, and you can withdraw them at any time.
  • If you withdraw before age 59½, you're subject to a federal penalty tax of 25% if you take the distribution within the first 2 years of participating in the plan and 10% if taken after that time. Certain exceptions may apply.
  • You can’t take a loan from your SIMPLE IRA.
  • You’ll pay ordinary income tax on any taxable distributions.

Ready to get started?

If you're new to Vanguard, give us a call.


Are you a Vanguard client looking to open a SIMPLE-IRA? Set up your new plan today.

Learn more about small-business retirement

Enhance your retirement plan

Looking to enrich your existing retirement plan with quality mutual funds? Our investment-only service opens the door for you to offer Vanguard funds. 

Learn about our investment-only option

Move your plan to Vanguard

Consider moving the small-business plan you hold elsewhere to Vanguard. You can enjoy high-quality, low-cost funds and reliable service for your portfolio.

Learn how to transfer your plan

All investing is subject to risk, including the possible loss of the money you invest.

For more information about Vanguard funds or ETFs, visit to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.