WealthRabbit SIMPLE IRA vs. Illinois Secure Choice: What small businesses need to know
The Illinois retirement mandate
Illinois employers with five or more employees who do not offer a qualified employer-sponsored retirement plan are required by law to provide access to a retirement savings option. For most, that means registering for Illinois Secure Choice, the state-run Roth IRA program.
If you’re a business owner, this mandate may already apply to you. Deadlines have been phased in since 2018, and employers with at least five employees are now required to participate or face penalties.
While Secure Choice ensures workers have a basic savings option, it may not provide the flexibility or benefits your team actually needs. That’s where WealthRabbit’s SIMPLE IRA can be a smarter solution.
What is Illinois Secure Choice?
Secure Choice is a state-facilitated Roth IRA program that automatically enrolls eligible employees. Employers do not contribute to the plan, but they must register and process payroll deductions.
Key points about Secure Choice:
- Employee-only contributions (Roth IRA only)
- Contribution limit of $7,000 per year ($8,000 if age 50+)
- Limited investment options chosen by the state
- No tax credits or deductions for employers
- Employers must handle registration and payroll setup
- Employees can opt out at any time
What is a WealthRabbit SIMPLE IRA?
WealthRabbit’s SIMPLE IRA is an employer-sponsored retirement plan designed for small businesses with up to 100 employees. Unlike Secure Choice, it allows both employers and employees to contribute.
Key features include:
- Employer contributions (required: 3% match or 2% non-elective), which are tax-deductible
- Higher contribution limits for 2025:
- Standard: $16,500
- SECURE 2.0 - Small employers (25 or fewer employees): $17,600
- Age 50–59 or 64+ catch-up: Additional $3,500 (or $3,850 for small employers)
- Age 60–63 super catch-up: Additional $5,250
- Flexible investment choices
- Automated payroll integration with providers like QuickBooks, ADP, and Gusto
- No annual IRS filings or complex paperwork
- Compliance automation and expert support
The real cost of non-compliance
Illinois has already rolled out deadlines, which means most businesses with five or more employees should be enrolled in either Secure Choice or a qualified alternative plan like a SIMPLE IRA.
Non-compliance comes with financial consequences:
- $250 fine per employee for the first calendar year for failing to enroll after notice
- $500 fine per employee for each subsequent calendar year of non-compliance
That means a business with 10 employees could owe $2,500 in year one and $5,000 annually in subsequent years until compliant.
For many small businesses, these fines represent avoidable costs that could instead go toward offering a tax-deductible retirement benefit through WealthRabbit.
Awareness: Many small businesses don’t see it coming
Despite being one of the earliest state-run retirement programs, awareness remains low. National research shows:
- Roughly three-quarters of small business owners aren’t familiar with state retirement mandates.
- About 65% don’t realize fines exist for non-compliance.
- A majority of workers are also unaware that they may be entitled to a workplace retirement benefit.
This lack of awareness means many businesses risk being caught off guard — paying fines instead of taking advantage of tax benefits and stronger retirement solutions.
Making the right choice for your business
For employees, the difference between Secure Choice and a SIMPLE IRA is significant.
With Secure Choice:
- Employees can only contribute to a Roth IRA
- No employer contributions are allowed
- Investment options are limited and state-controlled
With WealthRabbit SIMPLE IRA:
- Employer contributions are required (either 3% matching or 2% non-elective contribution)
- Employers receive tax deductions for their contributions
- Employees can contribute more with the higher 2025 contribution limits
- Employees have access to broader investment options tailored to their goals
Offering more than the bare minimum signals to employees that you’re invested in their future. It can also increase participation, improve retention, and help you retain talent in a tight labor market.
Choosing the right path forward
Illinois Secure Choice provides a starting point, but it isn’t always the right fit for employers or employees who want more flexibility, higher savings potential, and tax benefits.
As an Illinois employer, you now face a choice:
- Do the minimum with the state program and absorb ongoing administrative tasks.
- Or invest in a smarter solution with WealthRabbit’s SIMPLE IRA — giving your team more savings power while unlocking tax advantages and automated compliance.
Ready to get started?
Secure your team’s future and simplify compliance with a solution that works for both you and your employees.
Get started with WealthRabbit SIMPLE IRA today — the easy, affordable way to go beyond the mandate and build lasting financial security.
*Disclaimer: This blog is for educational purposes only and is not intended as tax, legal, or financial advice. Please consult a qualified professional regarding your specific situation.
