Planning & decision tool
Retirement plan-design comparator
Business owners can shelter far more for retirement than an employee can, and the plan you run decides how much. This shows the contribution capacity of a solo 401(k) and a SEP-IRA for your income and age, and explains how a cash-balance plan stacked on a 401(k) can shelter much more as you get older, so you can compare what each design admits.
Background reading: Business & side income
A cash-balance or defined-benefit plan can shelter far more, often well into six figures, but its limit is actuarial and age-dependent (an IRC 415(b) benefit limit), not a single dollar figure modeled here. It favors older high-earning owners; a precise number needs an actuary and a defined-benefit limit parameter.
This shows how much each plan lets you shelter; it does not pick a plan for you. The right plan depends on your age, employees, cash flow, and goals.
Choosing a plan is a conversation with a CFP, and for a cash-balance plan an actuary.
Assumptions and simplifications
- Net self-employment earnings are net profit minus the deductible half of self-employment tax; the employer contribution is the standard 20% of that figure for an owner.
- Capacities are capped at the IRC 415(c) total-additions limit; catch-up contributions sit on top of that limit.
- The cash-balance / defined-benefit figure is qualitative: its limit is actuarial and age-dependent and is not computed here.
- This assumes an owner with no non-spouse employees; a plan covering employees has different contribution and coverage rules.