Calculators Suite


Small Business Retirement Plan Selector

Small businesses are becoming increasingly aware of the role that retirement benefits can play in attracting and retaining talented employees. Retirement plans can also help business owners plan for their own financial futures. What's more, the IRS now allows small businesses to claim a federal income tax credit for half the cost of setting up and administrating a new plan.

Retirement plans can generally be broken down into two types: defined benefit and defined contribution. With defined benefit plans, the employer sets the employee's retirement benefit (usually based on a formula) and bears the majority of the risk if the plan's investments don't earn enough to pay those benefits. With defined contribution plans, the employee and/or the employer make contributions to the plan, and the employee is then at liberty, pursuant to IRS rules, to withdraw as little or as much as he/she wishes to in retirement.

This calculator deals only with defined contribution plans. Such plans generally break down into three types: IRAs, 401(k)s, and Profit Sharing Plans. Generally, IRAs are the easiest to set up and require the least employer involvement. However, they tend to be less flexible than 401(k) plans and may have lower contribution limits.

To get a sense of which type of plan might be best for your small business, answer the questions below, then click Submit.

Are you and/or your spouse the sole employee(s)?

Are you concerned with contributing as much as possible to your retirement plan?