If you’re self-employed or own a small business and you haven’t established a retirement savings plan, it’s time to get started. By establishing a plan, you help yourself – and your employees – get started saving for retirement. Different plan designs offer different options. It’s important to understand these options so that you can select the plan most appropriate for you.

Some retirement plans are IRA-based like Simplified Employee Pensions (SEP) and SIMPLE IRAs. The deposits made to these plans are held in individual retirement accounts. True qualified plans, like 401(k)s, profit-sharing plans and defined-benefit plans, are subject to ERISA* rules and held in a trust account by an administrator.

Qualified plans are generally more complicated and expensive to maintain than IRA-based plans because of the ERISA laws. With an IRA-based plan, your employees own their contributions immediately. However, with qualified plans, you can require that your employees work a certain number of years before they are able to remove the employers’ contributions.

Each plan type has unique advantages and disadvantages, so you’ll need to clearly define your goals before selecting a plan. For example, do you want to maximize the amount you can save for your own retirement? Do you want to establish a plan funded by employer contributions, employee contributions or both? How about the flexibility to skip employer contributions in some years? Or what about finding a plan with the lowest costs or easiest administration?

The answers to these questions can help guide you and your retirement professional to the plan or combination of plans most appropriate for you.

First, what is SEP IRA? Many of you may have heard this name. A SEP IRA allows you to set up an IRA for yourself and each of your eligible employees. You contribute a uniform percentage of pay or flat dollar amount for each employee and you don’t have to make contributions every year. This plan offers you some flexibility when business profits vary. For 2015, your contributions for yourself and each employee are limited to the lessor of 25 percent of pay or $53,000.** Most employers, including those who are self-employed, can establish a SEP IRA. SEPs have low startup and operating costs.

A SIMPLE IRA plan provides you and your employees with a simplified way to contribute toward retirement. Both you and the employee contribute to the plan. SIMPLE IRA plans offer affordable costs and easy startup. Employees can contribute up to $12,500 on a tax-deferred basis through convenient payroll deductions. You can choose either to match the contributions of those who decide to participate or to contribute a fixed percentage of all eligible employees’ pay.

Finally, the 401(k) plan has become a hugely popular retirement savings vehicle for small businesses. With a 401(k) plan, employees can make pre-tax and/or Roth contributions in 2025 of up to $23,500 of pay, with an additional $7,500 catch-up contribution for those age 50 and older, and a new, higher catch-up contribution of $11,250 for those aged 60-63. There are many different ways to structure a 401(k) plan depending upon your goals.

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*ERISA stands for the Employee Retirement Income Security Act of 1974.

**20 percent of NBI if you are not a W-2 employee.