If you're a small-business owner, thinking long term isn't just about growth—it's also about building financial security for yourself and your team. One of the best ways to do that? Set up a retirement plan that works for your business.

Including a retirement plan in your benefits package can boost employee satisfaction and help you attract top-tier talent.

Whether you're a solo entrepreneur or leading a growing team, offering a retirement plan can help you support your employees, strengthen your benefits package, and invest in your own future at the same time.

Why Retirement Plans Matter for Small Businesses

Despite the clear benefits, only about one in four small businesses currently offer a retirement plan. Common concerns include administrative complexity, costs, and perceived lack of employee interest. But the truth is, offering a retirement plan is one of the most valuable investments you can make for your business and your people.

A well-structured plan allows you to:

  • Contribute to your own retirement with tax advantages

  • Support employees' long-term financial well-being

  • Attract and retain top talent

  • Reduce turnover-related costs

  • Benefit from tax deductions and credits for startup costs 

Choosing the Right Plan

To determine the best retirement plan for your business, consider:

  • Business size and number of employees

  • Administrative capacity and cost tolerance

  • Employee contribution preferences

  • Desired employer contributions

  • Your personal retirement savings goals

Also, consider the makeup of your team. Employees under 30 or with lower earnings may be less inclined to contribute right away—so communication and education are key. 

Common Retirement Plan Options

1. SIMPLE IRA

Best for businesses with 100 or fewer employees. Setting up and maintaining is easy, and employees choose their own investments.

  • Contribution: Employees contribute up to the IRS annual limit. Employers must either match up to 3% or contribute 2% of each eligible employee's compensation.

  • Vesting: All contributions are 100% immediately vested.

  • Administration: Minimal paperwork—handled by the financial institution.

2. 401(k)

Ideal for businesses of any size, but involves more administration.

  • Contribution: Employees contribute pre-tax income up to IRS limits. Employer contributions are optional but common.

  • Options: Includes traditional and Roth options. Solo 401(k)s are available for self-employed individuals.

  • Vesting: Immediate, unless the plan sets a vesting schedule.

3. SEP IRA

Designed for self-employed individuals or companies with a small team.

  • Contribution: Funded only by the employer. Contributions must be equal in percentage for all eligible employees (up to 25% of compensation).

  • Flexibility: Annual contributions are discretionary, making it easier to manage in lean years.

  • Vesting: Contributions are fully vested immediately.

Tips for Success

Once your retirement plan is in place, here's how to maximize its value:

  • Promote participation: Educate employees on the benefits and walk them through how to enroll.

  • Encourage full matching: Show employees how contributing enough to receive the full employer match is like earning free money.

  • Clarify withdrawal rules: Remind participants about early withdrawal penalties (10% before age 59½, with some exceptions).

Support Every Step of the Way

Choosing the right retirement plan doesn't have to be complicated. Work with a trusted financial institution to guide you through the setup, employee communication, and ongoing management of your plan.

Ready to get started? Connect with us to explore retirement options that fit your business goals and your team's future.