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Jackie Stewart

SIMPLE IRA Contribution Limits for 2024

The phrase SIMPLE IRA is written on a piggy bank. .

A SIMPLE IRA is a retirement plan designed for self-employed people and small businesses with 100 or fewer employees. It's a cheaper (and easier) plan for an employer to set up compared to a traditional 401(k). However, the amount a worker can save in a SIMPLE IRA is less than a 401(k).

2024 SIMPLE IRA contribution limits

For 2024, the annual contribution limit for SIMPLE IRAs is $16,000, up from $15,500 in 2023. Workers age 50 or older can make additional catch-up contributions of $3,500, for a total of $19,500. The contribution limits are the same if you’re self-employed.

By comparison, workers younger than 50 can salt away as much as $23,000 in a traditional 401(k) for 2024, plus another $7,500 if they're 50-plus.

Employee contributions to a SIMPLE IRA are made on a pretax basis, which lowers taxable income. The invested money grows tax-sheltered until you withdraw it in retirement, when those distributions are taxed as ordinary income.

If you pull money out before age 59-1/2, you face a 10% early-withdrawal penalty on top of taxes. The withdrawal penalty increases to 25% for SIMPLE IRAs if money is pulled out within two years of signing up for the plan.


A SIMPLE IRA can now be set up as either a traditional IRA or a Roth IRA. The Roth SIMPLE IRA was created by the 2022 SECURE Act 2.0, so some employers may not offer it yet.

If the SIMPLE IRA is a Roth, the employee contribution goes into the account after tax. Then the money can grow tax-free for decades and will be tax-free when withdrawn from the account beginning at age 59-½.

For 2024, employees can contribute up to $16,000, and $19,500 for employees age 50 and over. Roth contributions are not deductible but distributions are tax-free in retirement.

These dollar limits are aggregate for all pre-tax and Roth deferrals; in other words, you can’t contribute $16,000 in pre-tax deferrals and then an additional $16,000 in Roth deferrals.

Similar to 401(k) plans, employees will most likely be able to contribute any combination of pre-tax and Roth deferrals up to the annual limit. For example, an employee under age 50 may be able to contribute $10,000 in pre-tax deferrals and $6,000 in Roth deferrals to reach the $16,000 limit.

Employer contributions to SIMPLE IRAs

Workers participating in a SIMPLE IRA will always get a helping hand saving for retirement because employers must make some form of a contribution to employees' accounts. Self-employed people are allowed to contribute both their own and the employer’s share to a SIMPLE IRA.

An employer can choose to either make a dollar-for-dollar match of up to 3% of a worker's pay or contribute a flat 2% of compensation, whether the employee contributes or not. If your employer matches dollar-for-dollar up to 3% of pay, make sure you're contributing at least enough to qualify for the full match. If an employer contributes the flat 2% amount, the calculation for those non-elective contributions cannot be based on more than $345,000 of the employee’s salary in 2024, up from $330,000 in 2023. 

The money your employer contributes is vested immediately, which means those contributions are yours from the start and you get to take them with you when you leave no matter how long you’ve worked for the company. By contrast, other employer retirement savings plans, such as 401(k)s and 403(b)s, may require that you work for that employer for a set period, such as three or four years, to be fully vested.

SIMPLE IRAs offer a much broader selection of investments than most employer-sponsored retirement savings plans. In a SIMPLE IRA, workers can not only choose from thousands of mutual funds and exchange-traded funds but also hold individual stocks and bonds. The best investment is one that fits your long-term goals at the right price.

How SIMPLE IRA savers can build a bigger nest egg

SIMPLE IRA participants are allowed to contribute to an individual IRA at the same time, enabling retirement savers to maximize their contributions on two fronts. If you're already stashing away the maximum contribution allowed in your SIMPLE IRA — $16,000 for employees younger than 50, or $19,500 for 50-plus workers — but want to save even more for retirement, consider opening a separate traditional IRA or Roth IRA. Self-employed people may also fund a traditional IRA or Roth at the same time but not a SEP IRA.

For 2024, individuals younger than 50 can contribute up to $7,000 to a traditional IRA or Roth IRA. Retirement savers age 50 and up can make an additional $1,000 catch-up contribution. 

Roth IRAs have income limits. The maximum amount you can contribute to a Roth IRA for 2024 begins to phase out once modified adjusted gross income hits $146,000 for single filers and $230,000 those who are married and filing jointly. There's no tax deduction for Roth IRA contributions. Contributions to a traditional IRA for 2024 are tax-deductible, though this benefit will phase out if you also contribute to a 401(k) plan at work and reach a certain income threshold. The tax deduction phases out for single filers who have a modified gross income between $77,000 and $87,000.

If an IRA contributor is covered by a work retirement plan, joint filers must earn $123,000 or less to claim the full tax deduction. The deduction is fully phased out once you make $143,000 or more. If an IRA contributor is not covered by a retirement plan at work, then the deduction is phased out between $230,000 and $240,000 for joint filers.

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