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Robert Harding Financial Group


18301 North 79th Avenue D-149, Glendale, AZ 85308

Phone: 623-977-9823

Fax: 623-977-0181

Toll Free: 800-977-9823




March/April 2021

Retirement Plans for Business Owners

Retirement Plans for Business Owners

Depending on the future sale of your business to finance your retirement can leave you without the resources you'll need to live comfortably. Finding the right retirement plan for your business can make a big difference to you and your employees' financial futures.

Simplified Employee Pension Plans (SEPs)
You can set up a SEP IRA for yourself and each of your employees. Employers generally must contribute the same percentage of pay for each employee, although they do not have to make contributions every year. Employer contributions are limited to the lesser of 25% of pay, or $58,000 ($64,500 if age 50 or older) for 2021. SEPs have low start-up and operating costs. Employers can decide how much to put into a SEP each year, offering some flexibility when business conditions vary.

This is an option for employers with 100 or fewer employees. Under SIMPLE IRA plans, employees can set aside up to $13,500 in 2021 ($16,500 if age 50 or older). Employers must either match employee contributions dollar for dollar — up to 3% of an employee’s compensation — or make a fixed contribution of 2% of compensation for all eligible employees, even if an employee chooses not to contribute. SIMPLE IRA plans are easy to set up and administrative costs are low.

SIMPLE 401(k) Plans
Similar to SIMPLE IRA plans, Simple 401(k) plans are for small business owners with 100 or fewer employees. Under a SIMPLE 401(k) plan, an employee can elect to defer compensation — up to $13,500 in 2021 ($16,500 if age 50 or older). Employers must match contributions, up to 3% of pay, or make a non-elective contribution of 2% of each eligible employee’s pay. Total contributions to a participant’s account, not counting catch-up contributions, cannot exceed $58,000 for 2021.

Solo 401(k) Plans
This plan covers a business owner with no employees and his or her spouse. Contributions can be made to the plan as both employer and employee. The owner can make elective deferrals of up to 100% of “earned income,” up to the annual contribution limit in 2021 of $19,500 ($26,000 if age 50 or older), plus employer nonelective contributions of up to 25% of compensation as defined by the plan. Your financial professional can help you determine which plan is right for you.


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Securities and Investment Advisory Services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC.
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