Retirement Planning for Small Business Owners: More Affordable Than You Think

If you've always thought offering a retirement plan was too expensive or complicated for your small business, it may be time to reconsider.

Retirement plans can help business owners save for their own future, take advantage of tax benefits, and offer competitive benefits to employees. With options designed specifically for small businesses, getting started may be easier than you think.

SIMPLE IRA

If your business has 100 or fewer employees, a Savings Incentive Match Plan for Employees (SIMPLE) IRA may be worth considering.

SIMPLE IRAs offer many of the tax advantages of traditional retirement plans, with fewer administrative requirements and generally lower costs than a traditional 401(k).

Both employees and employers contribute to the plan. Employers generally choose between two contribution options:

• Matching contributions: Match employee contributions dollar-for-dollar, up to 3% of compensation.
• Nonelective contributions: Contribute 2% of eligible employees' compensation, regardless of whether they contribute.

For 2026, employees can generally contribute up to $17,000, with additional catch-up contributions available for those age 50 and older. Certain qualifying plans allow higher contribution limits.

Employer contributions are generally tax-deductible, providing another potential benefit for business owners.

Tax Credits Can Help Offset the Cost

The SECURE 2.0 Act introduced additional incentives and flexibility to help small businesses offer retirement benefits.

Eligible businesses with 50 or fewer employees may qualify for federal tax credits covering up to 100% of eligible retirement plan startup costs, subject to annual limits. Additional credits may also be available for qualifying employer contributions.

SECURE 2.0 also introduced the option for employers to offer Roth SIMPLE IRA contributions, giving employees the ability to make after-tax retirement contributions.

These incentives and options can make retirement plans more accessible while providing additional savings opportunities for employees.

Learn more from the IRS:

• Retirement Plan Startup Tax Credits
• SECURE 2.0 Act Changes Affecting Businesses
  
  ‍

Simplifying Retirement Planning

BNA Co-Managing Partner Jason Ackerman and BNA Wealth President Adam Ackerman have seen firsthand the challenges small business owners face when establishing retirement benefits.

Their experience led them to co-found WealthRabbit, a platform designed to simplify setting up and managing retirement plans, including SIMPLE IRAs.

For business owners interested in exploring potential savings, WealthRabbit also offers a retirement plan tax credit estimator.

Is a SIMPLE IRA Right for Your Business?

While SIMPLE IRAs can be an affordable and straightforward option, the right retirement plan depends on your business's size, budget, and long-term goals.

At BNA CPAs & Advisors, our tax and wealth management teams can help you evaluate your options and understand the potential tax advantages.

Connect with our team to start the conversation.
‍‍‍

Important Disclosure

The information provided in this article is for general informational and educational purposes only and should not be considered personalized tax, accounting, legal, or financial advice. Tax laws and regulations are subject to change, and the applicability of this information may vary based on individual circumstances. Readers should consult with a qualified professional before making decisions based on the information presented.

‍