Best For: Self-employed individuals or small businesses with few or no employees.

Contribution Limits: Up to 25% of each employee's compensation or $66,000 (for 2024), whichever is less.

Advantages: Easy to set up and administer, tax-deductible contributions, no annual filing requirements.

Considerations: The employer must contribute the same percentage of salary for all eligible employees, including themselves.

Best For: Self-employed individuals or business owners with no employees other than a spouse.

Contribution Limits: Up to $66,000 (for 2024) plus a $7,500 catch-up contribution for those 50 and older. This includes both employee and employer contributions.

Advantages: High contribution limits, allows both salary deferrals and profit-sharing contributions, loan options are available.

Considerations: Requires more administrative work, including filing Form 5500 once the plan reaches $250,000 in assets.

Best For: Businesses with multiple employees who want to offer a robust retirement plan.

Contribution Limits: Employees can contribute up to $23,000 (for 2024), including a $7,500 catch-up contribution for those 50 and older. Employers can also make contributions.

Advantages: High contribution limits, option for employer matching, flexible investment options, can attract and retain employees.

Considerations: More complex to set up and administer, requires annual compliance testing, and filing Form 5500.

Best For: Highly profitable small businesses where the owner wants to contribute a large amount towards retirement.

Contribution Limits: Contributions are based on the benefits the plan is designed to pay out, with potential for very high annual contributions.

Advantages: Can result in very large contributions and tax deductions, ideal for businesses looking to contribute significantly.

Considerations: Complex and expensive to administer, requires actuarial calculations, and is less flexible than other plans.

Best For: Highly profitable small businesses, especially those with older owners looking to maximize retirement savings.

Contribution Limits: Significantly higher than 401(k)s, potentially allowing hundreds of thousands of dollars per year, depending on age and income.

Advantages: High contribution limits, tax-deductible contributions, predictable growth with guaranteed interest credits, and the ability to take a lump sum or roll over to an IRA upon retirement.

Considerations: More complex and costly to administer, requires actuarial services, and has mandatory funding requirements. Less flexibility compared to defined contribution plans.