Unlocking Retirement Success: A Guide for Small Business Owners

You didn’t start your business just to work forever. Whether your goal is to retire comfortably, reduce financial stress or offer your employees meaningful benefits that keep them around, building a strong retirement strategy is essential.

As a small business owner, you’re not just responsible for your own future—you’re often the financial backbone of your employees’ futures too. Yet, many small business owners delay setting up a retirement plan, thinking it’s too complex, expensive or only for bigger companies.

But the truth is, the right retirement plan can help you:

Retire sooner with more savings
Attract and retain top talent
Stay compliant with growing state mandates
Boost morale and productivity across your team

Let’s break down how to make this happen.

Why Retirement Plans Matter More Than Ever

Retirement benefits aren’t just a “nice to have”—they’re a strategic business advantage. In fact, a 2024 Paychex report shows:

87% of employees say retirement savings is an important benefit.
81% of employers agree.
Only 37% of small businesses (1–49 employees) offer a plan.

That gap presents an opportunity. Offering a retirement plan can help your business win the talent war with competitive benefits and draw top candidates, retain your team as employees are more likely to stay with employers that invest in their future and boost productivity. Financially secure employees are less stressed and more focused.

Retirement Plan Options for Small Businesses

There’s no one-size-fits-all approach. The good news? There are options tailored to your business size and goals.

1. 401(k) Plans

Traditional 401(k)s let employees contribute pre-tax income, and employers can offer matching contributions. Thanks to the SECURE and SECURE 2.0 Acts, startup tax credits for small businesses have increased, making this option more affordable than ever.

2. Profit-Sharing Plans

Want flexibility? Profit-sharing plans let you decide how much to contribute each year, based on company performance. They can be combined with a 401(k) for even greater benefits.

3. Cross-Tested 401(k) Plans

Cross-tested plans allow employers to allocate contributions favoring certain employee groups, such as older or higher-compensated employees, while staying within compliance. This strategy can help business owners and key employees receive higher contributions. Cross-tested 401(k) plans include profit sharing programs and/or pension plans.

4. SEP IRAs

Simple, low-cost and employer-funded. SEP IRAs are a great option if you’re looking to make significant contributions without the complexity of a full 401(k) plan. Employers make contributions on behalf of employees, up to 25% of compensation or $70,000 in 2025, whichever is less.

5. SIMPLE IRAs

Designed for businesses with 100 or fewer employees, Savings Incentive Match Plan for Employees (SIMPLE) IRAs are easy to manage and allow both employee and employer contributions—ideal for lean teams that want structure without the admin burden.

Supercharging Your Own Retirement as the Owner

As the business owner, the right plan doesn’t just help your employees—it can dramatically grow your own retirement savings.

Cross-Tested 401(k): Structure it so you and other key employees get a higher allocation, while staying compliant.
Cash Balance Pension Plan: These defined benefit plans allow much larger contributions (often exceeding those of 401(k)s), perfect for those wanting to catch up fast or retire early.

Navigating State Retirement Mandates

More and more states are requiring businesses to offer retirement options. Don’t wait for fines or penalties to take action.

Know What’s Happening:

Programs like CalSavers and OregonSaves automatically enroll employees in Roth IRAs if no employer plan is offered.
Employers must either offer their own plan or enroll workers in the state program to remain compliant.

Taking Action: How to Get Started

Implementing a retirement plan doesn’t have to be overwhelming. Here’s how to begin:

Evaluate your business needs: Look at your team size, demographics, budget, and long-term goals.
Talk to a financial advisor: A specialist can help you choose the right plan and stay compliant.
Educate your team: Help your employees understand how the plan works and why it matters.
Review and refine: Your business will evolve—your retirement plan should too. Regularly review the plan’s performance and make adjustments as needed.

Conclusion: Build the Future You Want—Starting Today

You’ve built your business with hard work and vision. Now it’s time to put that same focus on your future.

By choosing the right retirement plan, you can:

Create long-term financial security
Stay compliant with changing laws
Attract and keep the best employees
Make retirement a reality—not just a dream

Your future is worth planning for. Start it today.