Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

A SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) allows small businesses to offer retirement savings plans with simpler and less costly administrative requirements compared to other retirement plans. The employer matching contributions are an important aspect of this plan.

In a SIMPLE IRA, employers are required to either match employee contributions dollar-for-dollar up to a maximum of 3% of an employee’s compensation or provide a non-elective contribution of 2% of compensation for all eligible employees, regardless of whether those employees make their own contributions.

Therefore, the maximum contribution percentage that an employer must match is indeed set at 3%. This structure encourages employees to save for retirement while still ensuring that employers are not excessively burdened with high matching requirements. It is important in retirement planning as it directly impacts both the accumulation of retirement savings and the incentive for employers to participate in providing these benefits.