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Solutions for Business Owners

Tax-Advantaged Accounts for Business Owners

A self-directed small business account at Equity Trust offers you the control and flexibility to choose both traditional and alternative investments.

Solo 401(k)

The Solo 401(k) (also known as Individual 401(k), Self-Employed 401(k), and Solo(k)) is for sole proprietors and offers the same benefits of the 401(k), but it is designated for business in which only the owner (and their spouse) is an employee.

Advantages:

A retirement savings plan specifically designed for the individual business owner
Higher contribution limits for tax-advantaged retirement investing
Opportunity to maximize contributions through employee and employer contributions

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Roth Solo 401(k)

The Individual 401(k) has the option to be set up with the added benefit of Roth-like tax-advantages.

Contribution limits to the Roth Individual 401(k) are the same as the Individual 401(k), but you designate them as Roth contributions. Those contributions won’t be eligible for a tax-deduction, but qualified withdrawals from the Roth Individual 401(k) are tax-free.

Advantages:

Investments can compound tax-free
Higher contribution limits for tax-advantaged retirement investing
Opportunity to maximize contributions through employee and employer contributions

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SEP IRA

Simplified Employee Pension (SEP), is designed for self-employed individuals or small businesses with less than 25 employees. The SEP allows for pre-tax contributions toward retirement without getting involved in a more complex qualified plan such as a 401(k). Contributions to a SEP are tax deductible and compound tax-deferred until withdrawn, pending that the distribution is taken after the account holder reaches 59 ½ years of age. Additional information related to SEP accounts can be found here.

Advantages:

Less complex and costly than a 401(k)
Allows individuals to contribute larger amounts
May qualify for larger tax deductions

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SIMPLE IRA

Savings Incentive Match Plan for Employees (SIMPLE) is a plan for small businesses, typically with 100 or fewer employees, that have no other retirement plans. With a SIMPLE plan, contributions are tax deductible and compound tax-deferred until withdrawn, pending that the distribution is taken after the account holder reaches 59½ years of age. Additional information related to SIMPLE accounts can be found here.

Advantages:

Less complex and costly than a 401(k)
Contribution limits are higher than individual retirement accounts and grow tax-deferred, without being subject to capital gains or income tax
Employees are always 100% vested in (or, has ownership of) all SIMPLE IRA money

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Pick the retirement plan that is right for you

Try our Small-Business Plan Picker
Do you own your own business? Deciding which small business retirement plan might be right for you can be tricky. To help you figure out what may be best for you, answer a few simple questions about you and your business in our Plan Picker.

Access Plan Picker

Details about the Solo 401(k), SEP and SIMPLE IRA plans, contribution and potential deduction amounts, eligibility, and income requirements

Let’s talk about your financial future.

Schedule a one-on-one session with an expert alternative investment counselor. We’re here to answer any questions, help guide you through the process, and provide more detailed information and education specific to your journey.

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Solutions for Individuals

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