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SEP IRA
Learn More |
SIMPLE IRA
Learn More |
Profit Sharing
Learn More |
Solo 401(K) Plan
Learn More |
Defined Benefit
Learn More
|
Who it's for |
Self employed business owners with few or no employees |
Businesses with less than 100 employees, want employees to contribute and have no other plan |
Small business with few employees whose profits or financial ability to contribute to a plan varies each year |
Ideal for business owners with no employees who want to make larger contributions than allowed in a SEP IRA |
Self employed business owners with few or no employees who earn $200,000 or more and want to save quickly for retirement |
Key features |
Easiest plan to administer, optional contributions |
Requires limited level of employer contributions, partially funded by employee salary deferrals, inexpensive to administer |
Permits higher employer contributions than SEP or SIMPLE, offers delayed vesting or waiting periods for participation, requires annual tax filing |
Allows employer and salary deferral contributions, varying contributions permitted & may skip contributions if need be |
Funding based on an annual target benefit rather than contribution limits, mandatory annual funding, requires actuary services |
Who can contribute |
Employer only |
Employer matching or non elective contributions with employee salary deferral contributions |
Employer contributions |
Employer contributions plus salary deferrals |
Employer contributions |
Contribution limits |
The lesser of 25% of an employee's compensation (or 20% for yourself if self-employed contributing to your own SEP) or $49,000. You may consider up to $245,000 compensation. |
Employee salary deferral of $11,500 and additional $2,500 if over age 50, plus employer match |
25% of salary (20% of self-employment income) up to $49,000 |
Employee salary deferral up to $16,500, $22,000 if age 50 or older. Profit sharing contribution: Up to 25% of compensation. Total employer/employee contributions cannot exceed $49,000 or 100% of your compensation |
No set limit. Contributions are based on actuarial assumption. Maximum annual retirement benefit is lesser of $195,000 or 100% of average compensation for highest three consecutive years |
Annual filing & maintenance
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None |
None |
Form 5500, TPA services required |
None, if account is less than $100,000 |
Form 5500, TPA services required |
Access to assets |
Penalty free after age 59 ½ , possible 10% penalty if taken before |
Penalty free after age 59 ½ , 25% penalty if taken within 2 years after first contribution and possibly 10% penalty if taken before age 59 ½ |
Trigger event must occur to withdraw. In service withdrawals may be permitted depending on plan |
Trigger event must occur to withdraw. Loans may be permitted depending on plan |
Trigger event must occur to withdraw. Loans may be permitted depending on plan |
| Deadlines
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Generally April 15 |
October 1 |
December 31 (or end of fiscal year) |
December 31 (or end of fiscal year) |
December 31 |
