SIMPLE IRA Contribution Calculator 2026
Calculate your 2026 SIMPLE IRA limits including employee salary deferral, employer match (2% non-elective or 3% match), age 50+ catch-up, and the new SECURE 2.0 enhanced catch-up for ages 60-63 — free, private, instant.
2026 SIMPLE IRA Contribution Limits
Per IRS SIMPLE IRA contribution limits, the 2026 employee elective deferral limit is $16,500 for standard participants, with an additional $3,500 catch-up for ages 50+ ($20,000 total). The SECURE 2.0 Act introduced an enhanced catch-up for ages 60, 61, 62, and 63 of $5,250 ($21,750 total) — at age 64 the catch-up reverts to the standard $3,500. Employees of small employers (25 or fewer workers) qualify for 10% enhanced limits: $18,150 standard, $3,850 catch-up, $5,775 ages 60-63 enhanced. Employer match is either dollar-for-dollar up to 3% of compensation, or a 2% non-elective contribution regardless of employee deferral. Total combined contributions cannot exceed 100% of compensation.
SIMPLE IRA vs SEP-IRA vs Solo 401(k)
SIMPLE IRA is best for small businesses with employees who want a low-administration retirement plan with mandatory employer contributions. SEP-IRA allows much higher employer contributions (25% of compensation up to $69,000 in 2026 per the SEP-IRA limits) but requires the employer to contribute the same percentage to all eligible employees — making it expensive once you have employees. Solo 401(k) is best for self-employed with no employees, allowing both employee deferral ($23,500 for 2026) and employer profit-sharing (25% of net SE income) up to a combined $70,000. The SIMPLE wins on simplicity for small businesses with rank-and-file employees, while Solo 401(k) wins on dollar amount for solo entrepreneurs.
Tax Treatment and Roth SIMPLE IRA
Traditional SIMPLE IRA contributions are pre-tax — they reduce your federal taxable income now, grow tax-deferred, and are taxed as ordinary income upon withdrawal in retirement. The SECURE 2.0 Act (effective 2023) authorized Roth SIMPLE IRA contributions, taxed now but tax-free in retirement. Many SIMPLE plan administrators have not yet added the Roth option — check with your employer's plan provider. Per IRS SIMPLE IRA Plan guidance, early withdrawal penalty is 25% (NOT 10% like other retirement accounts) during the first two years of plan participation, then drops to the standard 10%. Last updated May 2026.
Common SIMPLE IRA Mistakes to Avoid
Three common errors trip up participants. (1) Missing the deferral election deadline — your annual election must be made before the start of the plan year (December 31 for calendar-year plans), or before the first paycheck in your first year. (2) Not maximizing the employer match — if your employer offers a 3% match, contribute at least 3% to capture the full match. Anything less leaves free money on the table. (3) Rolling SIMPLE assets to a non-SIMPLE IRA in the first 2 years — triggers ordinary income tax plus the 25% early withdrawal penalty. After 2 years of participation, SIMPLE assets can roll to traditional IRA, 401(k), or other qualified plans without penalty.