Retirement Plan Comparison

Feature

401(k)
Solo 401(k) Safe Harbor 401(k) SIMPLE 401(k)
Profit Sharing SEP IRA SIMPLE IRA
Basic Plan
Type
 Defined Contribution
 Defined Contribution
 Defined Contribution
 Defined Contribution
 Defined Contribution
 IRA Based
 IRA Based
Who generally
adopts
 Corporations, Partnerships,
 Limited Liability Companies
Sole Proprietorships, Partnerships, Limited Liablity Companies and Companies and Corporations with no common law employees
Sole Proprietorships,
Partnerships, Limited Liablity Companies and Companies and Corporations
Sole Proprietorships, Partnerships, Limited Liablity Companies and Companies and Corporations with 100 of fewer eligible employees
Sole Proprietorships, Partnerships, Limited Liablity Companies and
Companies and Corporations
Sole Proprietorships,
Partnerships, and small businesses
Sole Proprietorships, Partnerships, Limited Liablity Companies and
Companies and Corporations with 100 of fewer eligible employees
Can Employer
sponsor other
qualified retirement
plans
 Yes  Yes  Yes  No  Yes  Yes  No
Who can contribute Employee; Employer Contributions are optional
Employee; Employer
Contributions are optional
Employee and Employer Employee and Employer Employer Employer
Employee and Employer
Cost Index Low to High depending on design complexity, service model adopted and other factors
Low to Medium Low to Medium Low to Medium Low to High depending on design complexity, service model adopted and other factors Low Low
Maximum employee
deferral contribution
The lesser of $17,000 for 2012 (indexed for inflation each year) or 100% of compensation
The lesser of $17,000 for 2012 (indexed for inflation each year)
or 100% of compensation
The lesser of $17,000 for 2012 (indexed for inflation each year) or 100% of compensation The lesser of $11,500 for 2012 (indexed for inflation each year or 100% of compensation  None None. Contributions are generally by Employer only
The lesser of $11,500 for 2012 (indexed for inflation each year) or 100% of compensation
Employer contributions Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligilbe employee is 100% of compensation not to exceed $50,000 Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligilbe employee is 100% of compensation not to exceed $50,000 Required match of 100% on the first 3% of employee deferral plus 50% on the next 2% of employee deferral
OR

3% of compensation to all eligible employees
Required match of 100% on the first 3% of employee's compensation
OR
2% of compensation to all eligible employees
Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligilbe employee is 100% of compensation not to exceed $50,000 Discretionary; cannot exceed the lesser of the 25% of the employee's compensation or $50,000 Required match of 100% on the first 3% of employee's compensation (may be reduced to 1% in 2 of any 5 years)
OR
2% of compensation to all eligible employees
Catch-up contributions
for those age 50 and older
$5,500 for 2012 (indexed for inflation each year) $5,500 for 2012 (indexed for inflation each year) $5,500 for 2012 (indexed for inflation each year) $2,500 for 2012 (indexed for inflation each year) N/A N/A
$2,500 for 2012 (indexed for inflation each year)
Employee eligibility Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Age requirement cannot exceed 21; service requirement can't exceed one year
Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Age requirement cannot exceed 21; service requirement can't exceed one year; two years if 100% vested; may exclude union employees Age requirement cannot exceed 21; have earned compensation in three of the past five years; received compensation of at least $550; may exclude union employees All employees earning $5,000 for any past two years and is expected to do so in current year; no age limit permitted; may exclude union employees
Who directs investments Employer/Trustee or Plan may allow individual direction Individual
Employer/Trustee or Plan may allow individual direction Individual
Employer/Trustee or Plan may allow individual direction
Individual Individual
IRS Reporting by employer  Form 5500
Form 5500-EZ when Plan Assets reach $100,000
 Form 5500
 Form 5500
 Form 5500
 None  None
Establishment deadline By the last day of the Plan Year for which the Plan is effective By the last day of the Plan Year for which the Plan is effective Any date between January 1 and October 1; may not have an effective date that is before the Plan actually adopted Any date between January 1 and October 1; as soon as administratively feasible for businesses established after October 1st
By the last day of the Plan Year for which the Plan is effective Established by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Any date between January 1 and October 1; as soon as administratively feasible for businesses established after October 1st
Funding deadline Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Unincorporated businesses -- employer/employee contributions: by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken; incorporated businesses -- employer contributions: by tax-filing date plus extensions and employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Funded by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Employee contributions must be deposited within 30 days after the end of the month in which the amounts would have been payable to the employee in cash; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
When can withdrawals be taken Withdrawals can generally be made for the following reasons:                    *termination of employment   *disability              *death            *retirement            *hardship                  
If taken prior to an employee reaching 59 1/2 may be subject to a 10% penality; withdrawals are generally considered taxable income
Withdrawals can generally be made for the following reasons:                    *termination of employment       *disability              *death            *retirement            *hardship                  
If taken prior to an employee reaching 59 1/2 may be
subject to a 10% penality; withdrawals are generally considered taxable income
Withdrawals can generally be made for the following reasons:                    *termination of employment   *disability              *death            *retirement            *hardship                  
If taken prior to an employee reaching 59 1/2 may be subject to a 10% penality; withdrawals are generally considered taxable income
Withdrawals can generally be made for the following reasons:                    *termination of employment   *disability              *death            *retirement            *hardship                  
If taken prior to an employee reaching 59 1/2 may be subject to a 10% penality; withdrawals are generally considered taxable income
Withdrawals can generally be made for the following reasons:                    *termination of employment       *disability              *death            *retirement            *hardship                  
If taken prior to an employee reaching 59 1/2 may be subject to a 10% penality; withdrawals are generally considered taxable income
Withdrawals can be taken at any time; withdrawals taken prior to an employee reaching age 59 1/2 may be subject to IRS penalties; withdrawals are generally considered taxable income Withdrawals can be taken at any time; withdrawals taken prior to an employee reaching age 59 1/2 and within the first 2 years of participation, my be subject to a 25% early withdrawal penalty; after 2 years, a 10% early withdrawal penalty would apply; withdrawals are generally considered taxable income
Minimum Vesting Immediate on Employee Contributions; Employer Contributions can be subject
to vesting schedule
 Immediate  Immediate  Immediate Employer contributions can be subject to vesting schedule
 Immediate  Immediate
Loans Employer Option
 Employer Option
 Employer Option
 Employer Option
 Employer Option
No
 
No
Roth Contributions Allowed  Yes  Yes  Yes  Yes  No No No
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