SIMPLE plans can be structured as which types of retirement accounts?

SIMPLE plans, which stand for Savings Incentive Match Plan for Employees, can indeed be structured as either a traditional IRA or a 401(k). This flexibility allows employers to offer a retirement savings option that is easy to administer and encourages employee participation.

When a SIMPLE plan is set up as a traditional IRA, employees can contribute pre-tax dollars and benefit from tax-deferred growth until they withdraw funds during retirement. If structured as a SIMPLE 401(k), employees can still enjoy tax advantages, but with potentially higher contribution limits and the option for loans.

The other choices presented do not accurately represent the structure of SIMPLE plans. A traditional IRA only or a Roth IRA only does not encompass the full range of possibilities allowed for SIMPLE plans, as they can indeed include features of 401(k) plans. Options referring specifically to a pension plan also fall outside the capabilities of SIMPLE plans which are not designed to be structured in that manner.