What Are Your
Retirement Account Options?
Whether you're just starting your career or nearing retirement age, understanding the retirement account options available to you can make a significant impact on your long-term financial health.
This article outlines the maximum annual contribution limits for different retirement plans, including options for employees and those that are self employed. Keeping in mind that these limits can help you make smart choices about which accounts you want to fund.
Sole Proprietorships and Partnerships
(Options when you are self-employed and have no employees)
Maximum employer contribution: Up to 20% of your net self-employment income, but not to exceed $69,000.
Maximum employee contribution: $23,000 ($30,500 if 50 or older)
Maximum employer contribution: 20% of your net self employment income, but not more than $69,000 considering both your employee and employer contributions ($76,500 if 50 or older)
Maximum employee contribution: $16,000 ($19,500 if 50 or older)
Maximum employer contribution: Either (1) A matching contribution equal to the lesser of 3% of your defined self-employment income or the amount of your elective deferral; or (2) A nonelective contribution of 2% of your defined self employment income limited to no more than $345,000.
Maximum employee contribution: $7,000 ($8,000 if 50 or older)
Maximum employer contribution: Actuarially determined amount needed to fund annual retirement benefit of up to $275,000
S Corporations and C Corporations
(Options when you are the only employee)
Maximum employer contribution: 25% of your wages, but not more than $69,000
Maximum employee contribution: $23,000 ($30,500 if 50 or older)
Maximum employer contribution: 25% of your wages, but not more than $69,000 considering both your employee and corporate (employer) contributions ($76,500 if 50 or older)
Maximum employee contribution: $16,000 ($19,500 if 50 or older)
Maximum employer contribution: Either (1) A matching contribution of 3% of your employee deferral up to 3%; or (2) A nonelective contribution of 2% of compensation to all eligible employees (you) whether or not you make a salary deferral.
Maximum employee contribution: $7,000 ($8,000 if 50 or older)
Maximum employee contribution: $7,000 ($8,000 if 50 or older)
Maximum employer contribution: Actuarially determined amount needed to fund annual retirement benefit of up to $275,000
Retirement planning is a critical step in ensuring financial security and peace of mind for your future. With a variety of retirement plan options available, it can be overwhelming to navigate through them all to find what best suits your needs. If you need help choosing which plan is best for your circumstances, click here to learn more about our tax & business consulting services.
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