Compare Small Business Retirement Options
Find the best fit for your business by comparing the features, benefits and requirements of each small business retirement plan we offer. For detailed plan information, simply click on the individual titles or call a T. Rowe Price Small Business Retirement Specialist at 1-800-831-1344
Plan Features SEP-IRA SIMPLE IRA Individual (Solo) 401(k) 401(k) for
Small Businesses

Who is it for?

SEP-IRA

For self-employed individuals and business owners who wish to make contributions for employees at a low administrative cost

SIMPLE IRA

For self-employed individuals and businesses with up to 100 employees who wish to allow both employee and employer contributions

INDIVIDUAL (SOLO) 401(K)

For one person business owners who want to make the highest contribution possible (for themselves and a working spouse)

401(K) FOR SMALL BUSINESS

Generally, for employers with fewer than 1,000 employees who wish to offer a cost-effective 401(k) plan

Key benefits

SEP-IRA

Easy and inexpensive to set up and maintain

SIMPLE IRA

A low-cost and easy to administer plan

INDIVIDUAL (SOLO) 401(K)

Allows for the highest contributions in many cases

401(K) FOR SMALL BUSINESS

Retirement plan with both employee and employer contributions, allowing sponsor and participant to maximize tax deductions and tax-deferred savings

What is the maximum employer deductible contribution?*

SEP-IRA

25% of total compensation** of all eligible employees

SIMPLE IRA

Employer chooses either:

Non-elective contributions of 2% of each eligible employee's compensation**

OR

Matching contributions of each employee's salary reduction contributions dollar-for-dollar up to 3%*** of the employee's compensation

INDIVIDUAL (SOLO) 401(K)

25% of total compensation** of eligible participants (i.e., owner, and if applicable, working spouse)

401(K) FOR SMALL BUSINESS

25% of total compensation** of all eligible employees

May employees contribute?

SEP-IRA

No

SIMPLE IRA

Yes

INDIVIDUAL (SOLO) 401(K)

Yes

401(K) FOR SMALL BUSINESS

Yes

What is the salary deferral limit?

SEP-IRA

N/A

SIMPLE IRA

The lesser of:
100% of compensation, or for 2018, $12,500 ($15,500 if age 50 or older); for 2019, $13,000 ($16,000 if age 50 or older)

INDIVIDUAL (SOLO) 401(K)

The lesser of:
100% of compensation, or for 2018, $18,500 ($24,500 if age 50 or older); for 2019, $19,000 ($25,000 if age 50 or older)

401(K) FOR SMALL BUSINESS

The lesser of:
100% of compensation, or for 2018, $18,500 ($24,500 if age 50 or older); for 2019, $19,000 ($25,000 if age 50 or older)

Is the plan subject to a vesting schedule?

SEP-IRA

N/A

SIMPLE IRA

N/A

INDIVIDUAL (SOLO) 401(K)

No

401(K) FOR SMALL BUSINESS

Optional for the employer

What are the annual participant fees?

SEP-IRA

$20 account service fee for each mutual fund account with a balance below $10,000

SIMPLE IRA

$20 account service fee for each mutual fund account with a balance below $10,000

INDIVIDUAL (SOLO) 401(K)

$20 account service fee for each mutual fund account with a balance below $10,000

401(K) FOR SMALL BUSINESS

Varies depending on service structure and plan economics

What are the IRS filing requirements?

SEP-IRA

None

SIMPLE IRA

None

INDIVIDUAL (SOLO) 401(K)

May require annual IRS Form 5500

401(K) FOR SMALL BUSINESS

IRS Form 5500

Is the plan qualified?

SEP-IRA

No, IRA based

SIMPLE IRA

No, IRA based

INDIVIDUAL (SOLO) 401(K)

Yes (defined contribution)

401(K) FOR SMALL BUSINESS

Yes

What plan eligibility requirements can the employer choose to set?

SEP-IRA

Age:
no more than 21

Earnings:
$600 in 2018 and 2019

Years of Service:
employed by the current employer in up to three of the past five years

SIMPLE IRA

Age:
no restriction allowed

Earnings:
not to exceed $5,000

Years of Service:
no more than two years

INDIVIDUAL (SOLO) 401(K)

Age:
no more than 21

Earnings:
no restriction allowed

Years of Service:
no more than one year

401(K) FOR SMALL BUSINESS

Various options generally based on age and service

What is the plan setup deadline?

SEP-IRA

Your company's tax filing deadline (including extensions)

SIMPLE IRA

Generally, anytime prior to October 1 of each calendar year (for existing employers)

INDIVIDUAL (SOLO) 401(K)

By the end of the initial plan year, generally
December 31

401(K) FOR SMALL BUSINESS

By the end of the initial plan year, generally
December 31

May I still contribute to an IRA?

SEP-IRA

Yes††

SIMPLE IRA

Yes††

INDIVIDUAL (SOLO) 401(K)

Yes††

401(K) FOR SMALL BUSINESS

Yes††

*The maximum deductible contribution for federal income tax purposes.

**Maximum amount of compensation that can be used in determining contribution is $275,000 for tax year 2018 and $280,000 for tax year 2019. This amount is increased periodically for inflation.

***May be as low as 1% in no more than two years out of five consecutive calendar years.

The $20 account service fee will be waived for the following circumstances: Subscribe to electronic delivery of statements and confirmations (participants can subscribe to paperless delivery via the T. Rowe Price website once their account is established.); maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, and Small Business Retirement Plans); or qualify for T. Rowe Price Select Client Services. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant for that year or when the proceeds are being used for a rollover, transfer or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA account.

††Contributions may or may not be deductible.

A retirement account should be considered a long-term investment. Retirement accounts generally have expenses and account fees, which may impact the value of the account. Early withdrawals are subject to taxes and possible penalties. For more detailed information about taxes, consult a tax attorney or accountant for advice.

All investments are subject to market risk, including the possible loss of principal. Mutual funds are subject to management fees and expenses.