What is the maximum I can contribute to my SIMPLE IRA?

For 2026, the maximum an employee can contribute to a SIMPLE IRA is $17,000. If you are 50 or older, there is a catch-up contribution of $4,000, and if you are 60-63, the catch-up allowance is $5,250.

Does the employer have to match 3% for a SIMPLE IRA?

Employers can choose to either match employee contributions of up to 3% of salary, or contribute a flat rate of 2% of each employee's salary.

Can you contribute 100% of your salary to a SIMPLE IRA?

The employee contribution limit to a SIMPLE IRA in 2026 is $17,000 for participants under 50, $21,000 for ages 50 and older, and $22,250 for ages 60-63. This is separate from employer matching contributions, but is the most an employee can choose to contribute.

Do SIMPLE IRA contributions reduce taxable income?

SIMPLE IRA contributions reduce your taxable income in the year they were made. The exception is if you choose to make Roth contributions to a SIMPLE IRA, although this is a relatively new option and isn't very common yet.

SIMPLE IRA Contribution Limits in 2025 and 2026

What are the rules for SIMPLE IRA contributions?

By Matthew Frankel, CFP – Updated Feb 17, 2026 at 8:53 PM EST | Fact-checked by Parker Hicks

Key Points

SIMPLE IRAs let self-employed and small business employees save for retirement tax-efficiently.
In 2025, you can contribute up to $16,500; those 50+ can add up to $3,500 more.
Explore other plans like 401(k)s or traditional IRAs if you need higher contribution limits.

A SIMPLE IRA is a tax-advantaged investment account commonly used by self-employed individuals and small employers looking for an easy way to save for retirement.

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If you are contributing to multiple types of retirement accounts, make sure you understand the rules. For example, you are limited in the amount you can contribute to a traditional IRA if you or your spouse is covered by a workplace retirement plan -- including a SIMPLE IRA -- and your income exceeds a certain threshold.

By exploring all of your retirement plan options, you can choose the plan(s) that allow you to save the most while reaping tax benefits that make building your retirement nest egg cheaper and easier.

SIMPLE IRA Contribution Limit FAQ

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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@MattFrankelCFP

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SIMPLE IRA Contribution Limits in 2025 and 2026

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