SIMPLE plans are designed for which type of companies?

• A. Small companies with 100 or fewer employees
• B. Sole proprietors
• C. Large corporations with 1000+ employees
• D. Government agencies

Answer: (B)

SIMPLE plans are designed for small employers who want an easy and affordable way to offer retirement benefits to their employees. They’re meant to simplify administration and compliance for businesses with smaller workforces, rather than for large corporations or highly complex organizations. A sole proprietor fits this category well because it represents a small, individual-owned business that would typically sponsor a SIMPLE IRA to provide retirement options for any employees without the heavy administrative burden of bigger plans. Large corporations and government agencies usually rely on more comprehensive or different retirement arrangements, so they aren’t the usual targets for SIMPLE plans.