Business Retirement Plan Comparison


Whether you are self-employed or a small business owner, there are a wide range of small business retirement plans designed to meet your specific needs. All small business retirement plans can help you save toward your retirement and provide potential tax advantages at the same time.

The Benefits of Beginning Today
  • You may be able to take a tax deduction just for saving money for your future
  • All earnings on your investments grow tax-deferred until withdrawn
  • Your spouse may also be eligible
  • You'll have a key benefit to offer any employees today or when your business expands
  SEP SIMPLE Solo 401(k) Roth Solo 401(k)
Description: Specifically designed for self-employed people and small business owners who typically employ fewer than 25 employees. Designed for small businesses with 100 or fewer employees. The plan is funded by employer contributions and can also be funded by elective employee salary deferral. Created in 2002 to enable sole proprietors to set up and contribute to a plan offering the same benefits as the conventional 401(k). A savings plan offered to employees that allows them to set aside tax-deferred income for retirement up to $19,000 annually or $25,000 if age 50+.
Eligibility: Self-employed individual or small business owner, including those with employees. Businesses with 100 or less employees who do not currently maintain any other retirement plan. Self-employed individual or business owner with no employees other than a spouse. For public or private companies, generally most appropriate for companies with 20 or more employees.
Minimum Coverage: Plan must cover all employees who earn at least $550, are at least 21 years of age and have worked for employer in 3 of the last 5 years. Plan must cover all employees who earn at least $5,000 in the current year and have received at least $5,000 during any two preceding years. Plan can only cover sole-proprietor and spouse. The plan must be offered to any employee that is age 21 or older and has completed one year of service.
Employer Contributions: Required uniform % of each employee's pay (0-25%). Employer is required to make either an annual matching contribution between 1% and 3% or an annual non-elective contribution of 2% of compensation. Two components comprise the maximum Individual(k) contribution:
1.) An employee salary deferral contribution.
2.) An employer profit sharing contribution.
Depending on the terms of the plan, the contribution is allocated based on compensation, years of service, age, or matching basis with employee contributions or some combination of all of these.
Employee Contributions: Not Permitted Up to $13,000 in 2019.
(If age 50+, $16,000.)
$19,000
($25,000 if 50+)
$19,000
($25,000 if 50+)
Maximum Annual Contributions: 25%, up to a maximum of $56,000 for 2019. Maximum employee contribution of $13,000 in 2019 (If age 50+, $16,000.) Employer matches up to 3% of salary. $19,000 ($25,000 if 50+) and 0 - 25% of salary, up to a maximum of $56,000 for 2019 ($62,000 if 50+). $19,000 ($25,000 if 50+) and 0 - 25% of salary, up to a maximum of $56,000 for 2019 ($62,000 if 50+).
Maximum Deductions: 25% of participant's total compensation, excluding SEP contributions.
Maximum considered compensation $280,000 for 2019.
Same as maximum contribution. Same as maximum contribution. Same as maximum contribution.
Deadline
for Plan Establishment:
Any time up to date of employer's return (including extensions.) Any time between 1/1 and 10/1 of the calendar year. For a new employer beginning after 10/1, as soon as administratively feasible. Entries established during the year have until 12/31. The deadline for establishing a Solo 401 (k) and to make an employee salary deferral election is the last day of your business’ tax year. The deadline for employer funding is your tax filing deadline, including extensions. The deadline for establishing a Roth Solo 401(k) and to make an employee salary deferral election is the last day of your business’ tax year.
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