Retirement Savings Plans for Small Businesses

05/03/2022 Written by: Jenny Boudreau

According to the Small Business Administration, there are over 32 million small businesses in the United States. It may be difficult to believe, but 99.9% of all businesses in the U.S. are small companies. Even COVID didn’t slow down the number of small businesses launched – over 3.5 million businesses were started during the pandemic.

May is recognized as Small Business Month, and May 1-7, 2022, is National Small Business Week. This year’s theme, “Building a Better America through Entrepreneurship,” celebrates America’s small business owners doing their part to power our economy.

Over 59 million Americans work for a small business, representing nearly half of the private workforce. Many employers are struggling to hire and retain employees – and small business are facing the same difficulty. To attract workers amid a talent shortage, small businesses are offering new benefits, including retirement savings plans.

If you’re a small business owner, there are numerous choices when selecting the best retirement plan for your business. This article describes the four most common plans, but a financial advisor with experience with retirement plans will work with you to find the one that best suits your business.


SEP IRAs are a simple and relatively inexpensive way for sole proprietors and smaller businesses to offer a retirement plan. With no mandatory or minimum contributions, funding is provided only by the employer. If you have employees, you may be required to contribute for them as well.


SIMPLE IRAs offer minimal costs and administration, and are funded by employee and mandatory employer contributions. Employers choose to match dollar-for-dollar up to the first 3% of employee pre-tax contributions or match 2% of compensation to all eligible employees. Simple IRAs work well for companies with 25 or fewer employees.

Solo 401(k)

For small business owners with no employees, the Solo 401(k) may be a good option. An inexpensive way to save more money than most other retirement plans allow, you can contribute using a combination of salary deferrals and profit-sharing with no mandatory or minimum contributions. Spouses and equal business partners are also eligible to participate. You may allow a Roth 401(k) salary deferral within the plan.


The 401(k) is the most commonly used employer-sponsored retirement plan, becoming increasingly affordable and more widely used by businesses of all sizes. It’s a flexible plan offering the highest level of employee pre-tax contributions, a wide range of employer contribution options, and an optional loan provision. It works well for companies with ten or more employees who want to start a new plan or transfer an existing plan. Employers may choose to allow Roth 401(k) salary deferrals within their plan.

A quality retirement plan frequently ranks as a top priority when candidates are considering potential employers. The advisors at AssuredPartners Investment Advisors have the experience to help you make the most appropriate decision for your business and your employees. Contact us today to learn how we can help you select from a broad range of plans.

Tax Prep_square
Plan Sponsors: Don’t Miss Upcoming Deadlines
Retirement Plan Sponsors02/15/2023

As you know, the “Plan Sponsor is responsible for ensuring that its plan operates in compliance with the rules related to qualified plans.” 1  That, in turn, means, you are held accounting to the...

Is A Solo 401(k) Plan Right for Your Small Business?
Retirement Plan Sponsors12/27/2022

If you work for yourself, you may want to consider establishing a solo 401(k) plan for 2023. A solo 401(k) plan is a unique savings option for small business owners without employees, or if the only...

Is a PEP Right for You?
Retirement Plan Sponsors11/01/2022

Providing employees with a quality retirement savings plan may seem out of reach for smaller or start-up companies. But a key provision of the SECURE Act introduced a new option, called a PEP,...