Best Retirement Accounts for Small Business Owners (2026)

Every figure below is for 2026, the year you report on the return filed in spring 2027. Which plan fits depends on whether you have employees, how much you earn and how much you want to put away, which is a conversation to have with a preparer using your numbers.

1. Solo 401(k), for owners with no employees

A one-participant 401(k) covers a business owner with no employees, or the owner and a spouse. It usually allows the most for a lower or middle income, because you contribute in two roles:

• As employee: elective deferrals up to $24,500 for 2026, plus the $8,000 catch-up at 50 or older, or $11,250 at ages 60 to 63.
• As employer: a nonelective contribution of up to 25% of compensation. For a sole proprietor, compensation is net earnings from self-employment after deducting half of self-employment tax and the contributions themselves.
• Overall cap: total additions cannot exceed the lesser of 100% of compensation or $72,000 for 2026, before catch-up contributions.
• Once plan assets reach $250,000 at year-end, the plan files Form 5500-EZ each year.

The plan stops being “solo” the moment you hire an eligible employee, so revisit it before the first hire.

2. SEP-IRA, the simplest to run

A Simplified Employee Pension is funded only by the employer. There are no employee deferrals and very little paperwork. Contributions can be up to 25% of compensation, with the dollar cap of $72,000 for 2026 and compensation counted up to $360,000.

• Late setup allowed: a SEP can be established and funded as late as the due date of the business return, including extensions.
• Employees count: most SEPs, including the IRS model Form 5305-SEP, require the same percentage of pay for every eligible employee, meaning those who are 21 or older, worked for you in at least 3 of the last 5 years, and earned at least $800 in 2026.
• For a sole proprietor, the 25% is figured on net self-employment earnings after half of self-employment tax and the SEP contribution itself, so the effective rate is lower.

3. SIMPLE IRA, for small teams that want to share the saving

A SIMPLE IRA suits a business with generally 100 or fewer employees that wants staff to save from their own pay. Employees can defer up to $17,000 in 2026 ($18,100 in certain plans), with a $4,000 catch-up at 50 or older and $5,250 at ages 60 to 63.

• The employer must either match deferrals dollar for dollar up to 3% of pay or make a 2% nonelective contribution for every eligible employee; some plans use higher percentages under SECURE 2.0.
• A new SIMPLE IRA can generally start on any date from 1 January to 1 October of the year, so a plan for 2026 has to be in place by 1 October 2026.
• The employer cannot maintain any other retirement plan alongside it.

4. A 401(k) plan with employees

A traditional or safe harbor 401(k) offers the same $24,500 deferral limit and $72,000 total cap per participant as the solo version, with more flexibility in design. The trade-off is administration: nondiscrimination testing, plan documents and a provider. One 2026 detail for higher earners: 2026 catch-up contributions to a 401(k) must be made as Roth contributions by participants whose 2025 FICA wages from the employer were more than $150,000 (Notice 2025-67).

5. Traditional or Roth IRA, on top of or instead of a plan

Anyone with taxable compensation can contribute to an IRA. For 2026 the combined limit across all traditional and Roth IRAs is $7,500, or $8,600 at 50 or older. Contributions for 2026 can be made up to the return due date without extensions, 15 April 2027.

• Roth IRA income limits (2026): contributions phase out between $153,000 and $168,000 of modified AGI for single filers and heads of household, and between $242,000 and $252,000 for married couples filing jointly.
• Traditional IRA deduction (2026): if you are covered by a workplace plan, including your own SEP or 401(k), the deduction phases out between $81,000 and $91,000 single and $129,000 and $149,000 married filing jointly. If only your spouse is covered, the joint range is $242,000 to $252,000.

6. OregonSaves, the state program

OregonSaves is the state’s retirement savings program, run by the Oregon State Treasury. It matters to Oregon employers because it is a requirement as well as an option: all Oregon employers must either register for OregonSaves if they do not offer a workplace retirement plan, or certify an exemption if they already offer one or have no W-2 employees. Employees save into their own IRAs through payroll deduction; the employer pays no fees and takes on no fiduciary responsibility. Since 2018 the program has also been open to the self-employed.

For an owner who wants a bigger deduction for themselves, OregonSaves is not a substitute for one of the plans above, but it is the compliance baseline to check first. Payroll setup is covered on Oregon payroll compliance.