Your Guide to Retirement Planning as a Small Business Owner

Running your own business is incredibly rewarding, but securing your financial future for retirement is equally important. Unlike traditional employees with employer-sponsored plans, small business owners and the self-employed need to take a more proactive approach to saving for retirement.

This guide explores some of the most popular retirement savings options available to you in 2024, along with their key features and considerations:

Understanding Your Options:

  • SEP-IRAs (Simplified Employee Pension):

    • Ideal for: Small businesses and self-employed individuals.
    • Contributions: Made by the employer (you), with contribution limits adjusted annually by the IRS.
    • Tax Advantages: Employer contributions are tax-deductible.
    • Benefits: Easy to set up and manage, with minimal administrative fees. Employees gain immediate 100% ownership (vesting) of their account balance.
    • Considerations: Contribution limits may not be as high as other options.
  • SIMPLE IRA Plans (Savings Incentive Match Plan for Employees):

    • Ideal for: Businesses with 100 or fewer employees.
    • Contributions: Both employers and employees can contribute. Employers can choose between matching employee contributions (up to a certain percentage) or making a fixed, non-elective contribution for all eligible employees.
    • Employer Requirements: There's a mandatory annual contribution requirement for employers, which can be either a matching contribution or a non-elective contribution.
    • Considerations: Lower contribution limits compared to some other plans.
  • SIMPLE 401(k) Plans:

    • Ideal for: Businesses with 100 or fewer employees.
    • Contributions: Similar to SIMPLE IRA plans, with both employer and employee contributions allowed. Employers choose between matching contributions or making non-elective contributions.
    • Benefits: Offers greater flexibility than SIMPLE IRAs, allowing for features like loans and hardship withdrawals.
    • Considerations: Similar contribution limits as SIMPLE IRAs and slightly more complex administration.
  • Individual 401(k) Plans (Solo 401(k)):

    • Ideal for: Self-employed individuals and owner-only businesses, including those with a spouse working in the business.
    • Contributions: Both employer (you) and employee contributions are allowed (with the employee being yourself or your spouse). Contribution limits are typically higher than SEP-IRAs and SIMPLE IRAs.
    • Benefits: Offers the highest contribution limits among the plans mentioned here. Allows for features like loans and hardship withdrawals.
    • Considerations: The administration process can be more complex compared to SEP-IRAs and SIMPLE IRAs.

Choosing the Right Plan:

The best retirement plan for your business depends on several factors, including your business size, number of employees, income levels, and your desired level of contribution flexibility.

Next Steps:

  • Consult with a financial advisor specializing in small business retirement planning. They can help you assess your individual needs, calculate appropriate contribution amounts, and choose the plan that best suits your situation.
  • Review the latest contribution limits set by the IRS each year. These limits are subject to change, so staying informed ensures you're maximizing your retirement savings potential.

By taking a proactive approach and selecting the right plan, you can secure a comfortable and financially secure retirement after years of dedication to your small business.

Kenner French, is a former small business contributor at, author of three books, an executive at AI-focused, a keynote speaker, and a Dave Matthews Band fan!

Kenner French

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...of ABC's Shark Tank says in this video that Kenner is using AI "in an innovative way to help (entrepreneurs) save on taxes." Kenner has saved hundreds (if not thousands) of entrepreneurs IRS/tax dollars, increase wealth, and protect their financial legacy. His strategy can work for you as it has so many entrepreneurs across the globe!
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