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Working / Accumulation Phase, Assets and Investment Planning

Should I Set Up A Traditional 401(k) For My Business?

Updated 12/1/2023

Business owners who are considering a retirement plan for their business have many options. While a traditional 401(k) is a well-known choice among business owners, there are many cases where other retirement plan options may be better suited for the business and the owner.

To help make this analysis easier, we have created the “Should I Set Up A Traditional 401(k) For My Business?” flowchart. It addresses some of the most common issues that arise for a client looking to set up a retirement plan for his or her business. This flowchart considers:

  • Which plans may be better when there are no employees
  • When a defined benefit pension plan could be set up
  • Options to review when the goal is to save more than the annual total contribution limit
  • Maximum employee contribution amounts for plans
  • Which plans have mandatory matching contribution requirements
  • Minimum employer matching contribution amounts
  • Plans that offer more flexibility
Related Guides
Will The Deductibility Of My Retirement Plan Contributions Be Impacted By The QBI Rules?
Category: Working / Accumulation Phase, Tax Planning
Am I Eligible For A Qualified Business Income (QBI) Deduction?
Category: Working / Accumulation Phase, Tax Planning
What Issues Should I Consider When Starting A Business?
Category: Working / Accumulation Phase, Life Events
What Issues Should I Consider If I Experience A Sudden Wealth Event?
Category: General, Working / Accumulation Phase, Estate Planning, Life Events
Should I Establish A SEP IRA Or A SIMPLE IRA Plan For My Small Business?
Category: Working / Accumulation Phase
Common Retirement Plans For Small Business Owners
Category: Working / Accumulation Phase
Common Pension Plans For Small Business Owners
Category: Working / Accumulation Phase
What Issues Should I Consider As A Business Owner Or 1099 Worker?
Category: Working / Accumulation Phase, Tax Planning, Life Events

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“Having been trained in a CPA firm, checklists were how everything was done, I was amazed to learn how little checklists were utilized in FP [Financial Planning]. I had created my own but FP Pathfinder has outdone me in creating current issue lists and updates. This is a must for any advisor. ”
— Advisor from California
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— Phillip, an advisor in North Carolina
“In client meetings I'm often sharing a checklist regarding a specific topic, and helping clients understand the planning issues, opportunities, and process all very quickly and efficiently.”
— An advisor in Texas
“I just met with a client who had a question regarding her eligibility for Social Security benefits. We went through the flowcharts answering each question and following the lines. She looked at me and said 'This is great, it was so much easier to use this than trying to go through all the literature that Social Security offers. Thank you so much.'”
— Ben G, an advisor in Wisconsin
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— Robert, an Advisor in Colorado
“Checklists don't make the planner smarter or more skilled, but do help to ensure that the planner maximizes the knowledge and skill he/she already has.”
— Michael Kitces, Publisher and Editor-In-Chief at Kitces.com
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