When running a small business, there’s always something to do and too many other priorities before you can consider taking the energy to research what retirement plan could be the best for your business.
But we know we need the power of compound interest to grow our money and the most critical input to that is time. So it is more important to start investing than to wait for the perfect time.
Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies, here to guide you to a successful stress-free retirement while spending more and avoiding being killed in taxes.
The key differentiator across retirement plan options is going to be your allowable contributions, your employer required contributions, tax status of contributions, investment selections within plans, how they are run and administered, and how they are paid for. The first plan to start with is generally the Simple IRA, suitable for small businesses with fewer than 100 employees. This is the more common option because it is simple to set up and run. Once the plan is established, individual accounts and fees are all on the employee. Simple IRAs can invest in the broad markets and don’t lock you into any investment funds.
Currently, Simple IRAs use pre-tax dollars, but post-tax Roth-style accounts are under web. With contributions in 2025, an individual can put away $16,500 per year or $20,000 if over 50. Employers have two matching contribution options: a dollar-for-dollar match up to 3% of the employee’s salary, or 2% of employee’s salary for every single employee, whether they contribute or not. Employer contributions are tax deductible.
If you are looking to put more money into a qualified plan, one option is the SEP IRA, which allows large employer contributions. The SEP is generally better suited for solo operations or with very few employees.
Moving to 401k options: 401ks are a heavier administrative burden than the simpler IRA. Solo 401k is an option for solo operations, allowing $23,500 of tax-deferred savings per year, or $31,000 if over 50. This allows employer contributions up to 25% of salary. A simple 401k is also an option but includes added administrative work. Alternatively, start a traditional or Roth IRA while delaying a plan through the business.
Remember, the best time to plant a shade tree was 20 years ago. The second best time is today. For a free tech-smart retirement plan, visit our website at BocaRetirement.com and enter your information in our pop-up. Contact us at contact@BocaRetirement.com for any questions.
