Currently, inVesti offers two types of Employer Sponsored IRAs as well as Individual IRAs, Traditional and Roth.

EMPLOYER SPONSORED IRAs

For both SEP and SIMPLE IRAs, we offer payroll deduction services via ACH and you can also bundle our IRAs with our inVesti HSA product as well. Easy to set up and easy to maintain by any business owner or administrator.

SEP IRA (Simplified Employee Pension)

SEP IRAs are adopted by business owners to provide a retirement benefit for themselves and their employees. There are no significant administrative costs, and it is an easy benefit to manage. inVesti will work with you to setup contributions, record keeping, participant investment allocations, and distributions.

Why Consider a SEP IRA?

• The freedom of choosing to make contributions each year.
• A plan with low start-up and operating costs.
• A value-added plan to attract quality employees.
• Can contribute to employees’ retirement and yet it offers the flexibility on how much to contribute.
• Available to a sole proprietor, independent contractor, self-employed, partner, or corporation.
• Employer tax deduction for Contributions

SEP IRA Contribution Limits

SEP IRAs come with very high annual contribution limits (set by the IRS), generally the same as a 401(k). SEP IRA contributions can be as much as 25% the participant’s salary, up to the annual contribution limit.

Who owns SEP contributions?

Contributions to SEP accounts are made by the employer. Once made, they are always 100 percent vested, or owned, by the employee.

What are the basic withdrawal rules?

SEP contributions and earnings are held in SEP IRAs and can be withdrawn at any time, subject to the general limitations imposed on traditional IRAs. A withdrawal is taxable in the year received. If a participant makes a withdrawal before age 59½, generally a 10% additional tax applies. SEP contributions and earnings may be rolled over tax-free and penalty free to other IRAs and retirement plans.

SEP contributions and earnings must eventually be distributed following the IRA required minimum distribution rules. Participant loans are not permitted.

SIMPLE IRA (Savings Incentive Match Plan for Employees)

A Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA) is a type of tax-deferred employer-provided retirement plan that allows employees to set aside money to grow for retirement. Specifically, it is a type of Individual Retirement Account (IRA) that is set up as an employer sponsored plan. Similar to better-known plans such as the 401(k) and 403(b), the SIMPLE IRA offers easier and less costly administration. Like a 401(k) plan, the SIMPLE IRA can feature two contribution streams, employee and employer. Employee contributions can be funded with pretax payroll reductions.

Employer SIMPLE IRA Eligibility

Must have 100 or fewer employees who earned at least $5,000 last year. An employer can exclude an employee from the plan if: Covered by a collective bargaining agreement, if retirement benefits were the subject of good faith bargaining between you and the employee representatives; Non-resident aliens and who received no U.S. source earned income.

SIMPLE IRA Contribution Limits

Contributions have an annual maximum for the employee which is typically greater than the amount for a Traditional or Roth IRA but less than the annual maximum for 401(k)s. Those who are 50 or older get to make an additional catch-up contribution. Employer contributions are not required. The employer can choose to make a contribution of 2% of each participant’s compensation or can choose to match employee contributions up to 3% of the participant’s compensation.

Both employer and employee contributions are always 100 percent vested, or owned, by the employee.

What are the basic withdrawal rules?

The rules for SIMPLE IRA distributions are similar to those of a Traditional IRA. Generally, you must pay income tax on any amount you withdraw from your SIMPLE IRA. You may also have to pay an additional tax of 10% or 25% on the amount you withdraw unless you are at least age 59½ or you qualify for another exception. After the account has been open for 2 years, contributions and earnings may be rolled over tax-free and penalty free to other IRAs and retirement plans.

SIMPLE IRA contributions and earnings must eventually be distributed following the IRA required minimum distribution rules. Participant loans are not permitted.

INDIVIDUAL IRAs (No Employer Sponsor Required)

Traditional and Roth IRAs are individual custodial accounts created for any person with earned income to save money for retirement. Each account has tax benefits to enhance the savings efforts of the account holder.

Traditional and Roth IRAs do not require an employer to sponsor the plan.

Traditional IRA

In a Traditional IRA, contributions are made “pre-tax”, investment returns are tax deferred, and distributions are taxed at the income tax rate for the participant in the year of the distribution.

Key Features:

• Tax deduction for the contribution amount in the year of the contribution
• Catch Up provision so that those over 50 years old can contribute more
• Investment earnings remain inside the account and are not taxed until distributed
• Penalty for early withdrawal
• Required Minimum Distributions at the age prescribed by the IRS

Roth IRA

In a Roth IRA, contributions are made “post-tax” (i.e. no tax deduction in the year of contribution), investment returns are tax deferred, and qualified distributions are not taxed.

Key Features:

• Qualified Distributions are not taxed.
• Catch Up provision so that those over 50 years old can contribute more.
• Investment earnings are not taxed and remain in the account until distributed.
• Penalty for early withdrawal.
• No Required Minimum Distributions.