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Features |
Individual 401K |
SEP IRA |
One-person plan |
SIMPLE IRA |
Primary Feature |
Higher contribution limits with minimal administration. |
No reporting requirements with minimal administration. |
Potentially substantially higher contributions allowed than other retirement plans, especially at older age. |
Employees can contribute to their own retirement savings. |
Who contributes? |
Employee: contributions via salary reduction Employer: discretionary annual contributions. |
Employee: none Employer: discretionary annual contributions. |
Employee: none Employer: mandatory annual contributions. |
Employee: contributions via salary reductions Employer: mandatory annual contributions. |
Setup and Administration |
Establish with a third party administrator; IRS form 5500 may be required. |
Establish with IRS Form 5305-SEP; no annual filing required. |
Establish with a third party administrator; IRS Form 5500 may be required. |
Establish with IRS Form 5304-SIMPLE; no annual filing required. |
2020 contribution limits |
Employer contributions up to 25% of compensation and employee salary deferrals of up to $19,500 ($26,000 for employees age 50+). Total plan contributions per participant cannot exceed $57,000 ($63,000 if age 50+). |
Employer contribution of up to 25% of compensation for each participate, not to exceed $57,000. |
Contribution determined annually by an actuary. Contact us for details. |
Employee can make an elective deferral of up to $13,500 ($16,500 for employees age 50+), limited to 100% of compensation Employer must generally make either 3%-of-compensation match to the employees who contribute, or 2%-of-compensation non-elective contribution to all eligible employees whether they contribute or not. |
Minimum employee coverage requirements |
Generally, must be available to owners and spouses who work at least 1,000 hours per year. Business cannot adopt an individual 401K plan if there are any full-time employees other than the owners and spouses. |
Generally, must be available to all employees who are at least 21 years old and have worked for the employer for three of the last 5 years AND have earned income of $600 (for 2020). |
Generally must be available to all employees who are at least 21 years old and work at least 1,000 hours per year. |
Generally, must be available to all employees who have compensation from the employer of at least $5,000 in any prior two years and are reasonably expected to earn at least $5,000 in the current year. |
Deadline for establishing the plan |
December 31, or fiscal year end. |
Business tax filing deadline (including extensions), or personal tax filing deadline for sole proprietor (including extensions). |
December 31, or fiscal year end. |
October 1 |
allianz_small_business_big_opportunity.pdf | |
File Size: | 3618 kb |
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Oakhills Financial Services4590 MacArthur Blvd, Ste. #500
Newport Beach Ca 92606 P: (562) 665-1247 F: (562) 309-8183 [email protected] Registered Representative of and Securities products offered through Capital Synergy Partners, Member FINRA/SIPC 2860 Michelle Drive, Suite 150, Irvine, CA 92606. Phone: (888) 277-1974 Oakhills Financial Services and Capital Synergy Partners are Unaffiliated Entities |