Resources · Guide
The specific numbers for 401(k), Solo 401(k), SEP IRA, and SIMPLE IRA plans — plus the deadlines and trade-offs that decide which one actually fits your business.
Owner-only businesses (plus a spouse on payroll).
Self-employed and small teams that want the simplest setup.
Businesses with 100 or fewer employees wanting low administration.
Growing companies with W-2 employees and profit-sharing goals.
Figures reflect the 2026 plan year and are indexed annually for inflation. Compensation used to calculate employer contributions is itself capped, and self-employed owners calculate contributions on net earnings after the self-employment tax deduction. Confirm current-year figures with your CPA before funding.
If you have no full-time employees beyond a spouse, a Solo 401(k) is usually the highest-capacity option. Once you add staff, coverage and non-discrimination testing change the math and a traditional 401(k) with profit sharing or a SIMPLE IRA becomes the practical choice.
SEP IRA contributions are fully discretionary year to year, which suits lumpy income. SIMPLE IRAs require an employer contribution every year, so they favor steadier cash flow.
A SEP can be opened after year-end. A SIMPLE IRA generally cannot be started after October 1 for the current year. Missing a date usually costs a full year of deductible contributions.
Every dollar deferred is a dollar taxed later, often inside your heirs' highest bracket. Pairing qualified savings with Roth conversions, insurance-based income, and a trust strategy is what turns a large balance into usable, transferable wealth.
Yes, but the employee deferral limit is shared across all 401(k)-type plans you participate in. The overall annual additions limit applies per unrelated employer, and controlled-group rules can combine businesses you own.
For most owner-only businesses, a Solo 401(k) allows a larger contribution at moderate income than a SEP IRA because it stacks an employee deferral on top of the employer contribution. At very high income the two converge at the same overall cap.
Qualified plans are tax-deferred, not tax-free, and they pass to heirs with distribution rules attached. A protection-first plan pairs the retirement account with insurance-based and trust strategies so income, taxes, and legacy are coordinated rather than siloed.
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