Plan types compared
Which kind of retirement plan fits your company?
Each plan type balances cost, flexibility and how much the company must contribute. The dollar figures are the IRS limits for 2026.
Plan types compared
Employer retirement plan types compared, 2026
| Plan | Often a fit for | Employee saving, 2026 | Employer contribution | Administration |
|---|---|---|---|---|
| Traditional 401(k) | Companies that want flexible design and can manage annual testing | Up to $24,500, plus an $8,000 catch-up at 50+ ($11,250 at ages 60–63) | Optional: a match and/or profit sharing as the plan allows; can vest over time | Higher: annual nondiscrimination (ADP/ACP) testing, Form 5500, plan document; larger plans may need an independent audit |
| Safe harbor 401(k) | Owners and higher earners who want to save more without failing testing | Same as a traditional 401(k) | Required: 3% of pay to every eligible employee, or a match of 100% of the first 3% plus 50% of the next 2%; vested immediately | Moderate: ADP/ACP testing generally not needed; annual safe harbor notice; Form 5500 |
| SIMPLE IRA | Employers with 100 or fewer employees who want low setup cost | Up to $17,000, plus a $4,000 catch-up at 50+ ($5,250 at ages 60–63); some plans allow $18,100 | Required: a match up to 3% of pay, or 2% of pay for every eligible employee | Lower: no Form 5500; generally can’t be combined with another plan |
| SEP IRA | Self-employed owners and small firms with uneven profits | No employee salary deferrals | Employer only: up to 25% of pay or $72,000, at the same percentage for every eligible employee | Lower: no Form 5500; can require age 21, 3 of the last 5 years and $800 of pay (2026) |
| Solo 401(k) | An owner, and spouse, with no other eligible employees | Up to $24,500 plus catch-up | The business can add profit sharing, up to $72,000 combined (excluding catch-up) | Lower: Form 5500-EZ once plan assets exceed $250,000 |
| Cash balance plan | Profitable owners who want to save beyond defined-contribution limits, often alongside a 401(k) | Generally employer-funded | Required, set by a plan formula | Highest: enrolled actuary, minimum funding rules and, for many plans, PBGC premiums |
2026 IRS limits
2026 figures at a glance
Plan types we work with: 401(k), 403(b), Solo-K, SIMPLE IRA, SEP IRA, profit sharing, pensions and nonqualified executive compensation strategies. Recordkeeper/TPA partners: [[PLACEHOLDER: RECORDKEEPER / TPA PARTNERS]].
Sources: IRS 2026 plan limits (Notice 2025-67) · IRS 401(k) plan overview · IRS SIMPLE IRA plan · IRS SEP plan · IRS one-participant 401(k) · IRS catch-up contributions. Limits are adjusted most years.
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Important disclosures
This page is general education about employer-sponsored retirement plans. It is not legal, tax or ERISA compliance advice and does not recommend any plan type, investment or provider for a particular employer. Plan rules, contribution limits and tax credits change, and eligibility depends on your facts; consult your ERISA counsel, third-party administrator and tax adviser.
Investing involves risk, including possible loss of principal. A retirement plan advisor or investment manager cannot eliminate investment risk or a plan sponsor’s fiduciary responsibilities. Strong Tower Advisors is not affiliated with or endorsed by the U.S. Department of Labor or the IRS.
Employer-plan services disclosure. Investment advisory and fiduciary plan-advisor services are provided through TLG Advisors, Inc. (a Simplicity company), an SEC-registered investment adviser. Strong Tower Advisors and TLG Advisors are separate and unrelated companies. 3(38) investment management and 3(16) plan administration are typically provided by contracted plan providers, money managers and TPAs; specific roles are established through written agreements. Compensation, costs, who pays and conflicts of interest are disclosed in the applicable plan service-provider disclosures and engagement agreements; not all services are free.
Prepared by Strong Tower Advisors for general education about employer retirement plans. Rule-based content is linked to primary public sources (IRS, U.S. Department of Labor and Federal Register) and is reviewed periodically because plan limits and regulations change.
About Strong Tower Advisors · Editorial and sourcing standards · Last reviewed October 2026