SOMA Living April 2026

FINANCIAL FOCUS WHICH RETIREMENT PLAN IS RIGHT FOR YOUR BUSINESS? A workplace retirement plan can be a powerful asset for local business owners, offering tax advantages, stronger employee retention and greater long‑term financial security. Yet many assume these plans are complicated or only suited for large companies. Today’s retirement plan options are designed for businesses of every size, from solo entrepreneurs to companies with dozens of employees. The right plan depends largely on your business structure. For self‑employed individuals or businesses without employees, three plans are commonly used. SEP IRAs are straightforward, low‑maintenance and flexible in annual contribution levels. Owner‑only 401(k) plans offer higher contribution limits and borrowing options, though with added complexity. Owner‑only defined benefit plans work best for those with high, steady income who want to maximize contributions and secure guaranteed retirement income. Businesses with employees have additional options. SIMPLE IRAs suit companies with 100 or fewer employees seeking a low‑maintenance plan, though employer contributions are required. Traditional 401(k)s provide maximum flexibility, allowing both employee deferrals and employer contributions. Safe harbor 401(k)s eliminate complex testing requirements in exchange for required employer contributions. Cash balance plans, often paired with a 401(k), can be ideal for smaller companies with high‑earning employees and consistent cash flow. Each plan type carries its own eligibility rules, deadlines, contribution limits and administrative responsibilities. A financial advisor can help you evaluate the trade‑offs and select the plan that best aligns with your business goals and retirement needs. Starting a workplace retirement plan is an investment in your future, your business and your employees.

Gary T. Jones 973.821.4900 • g.jones@EdwardJones.com

With over 25 years of experience, I work with individuals and businesses to help you achieve your financial goals. As a longtime resident of SOMA, I am proud to serve the local community. To learn more about the content of this article or schedule an appointment to talk about your goals, please contact me in my Maplewood office.

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