Retirement Plans for Owners Compared

As a small business owner — especially if you're a more-than-2% shareholder in an S-corporation — the world of retirement planning can feel overwhelming. Each plan has different rules for contributions, timing, deductibility, and tax reporting.

Understanding Each Retirement Option

SEP IRA (Simplified Employee Pension) - **Who contributes?** Employer (the S-corp) only. - **How much?** Up to 25% of W-2 wages, capped at $69,000 (2024). - **Deadline:** Employer contributions can be made up to the S-corp tax return deadline.

Recommended Partners

Gusto Partner

Payroll, benefits, and HR

Patriot Software Advisor

Accounting and payroll software

Disclosure: We may earn a commission if you sign up through these links. This helps support our content.

SIMPLE IRA - **Who contributes?** Both employee and employer. - **How much?** Employee deferrals up to $16,000 (plus $3,500 catch-up if age 50+).

Traditional IRA - **Who contributes?** Individual personally. - **How much?** $7,000 (plus $1,000 catch-up if age 50+).

Roth IRA - **Who contributes?** Individual personally. - **How much?** $7,000 (plus $1,000 catch-up if 50+). - Contributions are not deductible, but qualified withdrawals in retirement are tax-free.

Solo 401(k) - **Who contributes?** Both employee and employer (for owner-only businesses). - **How much?** $23,000 deferral + 25% W-2 up to $69,000 ($76,500 w/catch-up).

Please consult your investment advisor for full details on each plan type and investment options.