Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

To be eligible for a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account), an employee must meet specific income criteria related to past and current earnings. The correct option emphasizes the requirement for an employee to have earned at least $5,000 in any two preceding years and to expect to earn at least $5,000 in the current year.

This criterion ensures that the employee has a consistent income level, indicating that they have had some stake in savings, and it promotes the use of the SIMPLE IRA as a viable retirement savings tool. The $5,000 threshold is significant because it aligns with the IRS guidelines aimed at establishing a baseline level of income that engages the employee in retirement planning.

Additional options do not capture these requirements effectively. Earning $1,000 in the current year does not reflect the necessary threshold for eligibility. Being employed for at least one year, while a consideration in some plans, is not a stipulated requirement for a SIMPLE IRA, where the emphasis is more on the earnings criteria. Lastly, having a retirement plan with another employer addresses a different aspect of retirement plan eligibility but is not relevant to the qualifications for a SIMPLE IRA. Hence, the focus on consistent earnings over periods is crucial for determining eligibility.