Comparison of Common Retirement Plans
By ePlan Services
Contribution Detail Differences
Below, we have outlined key contribution details for each common retirement plan. For more information, see the comparison chart below.
401(k) – Contribution Details
Who Can Contribute?
Employee; employer contributions are optional
Employee Contributions
- $22,500 salary deferral allowed
- Additional $7,500 catch-up contribution (50 years or older)
- Contributions may be pretax or post-tax (Roth)
Employer Contributions
Employer contributions are optional
Maximum Annual Contribution Per Participant
Employer/Employee Combined: Up to the lesser of 100% of compensation or $66,000 ($73,500 if 50 years or older)
Safe Harbor 401(k) – Contribution Details
Who Can Contribute?
Employee and employer
Employee Contributions
- $22,500 salary deferral allowed
- Additional $7,500 catch-up contribution (50 years or older)
- Contributions may be pretax or post-tax (Roth)
Employer Contributions
Employer can either contribute:
- Four methods of profit sharing allowed
- Mandatory 4% employer match (100% up to 3%, 50% on the next 2%)
Or they can contribute:
- 3% non-elective employer contribution.
- Match formula may be enhanced. (Note: Match can be applied to any deferral up to 6%)
Maximum Annual Contribution Per Participant
Employer/Employee Combined: Up to the lesser of 100% of compensation or $66,000 ($73,500 if 50 years or older)
Simple IRA – Contribution Details
Who Can Contribute?
Employee and employer
Employee Contributions
- $15,500 salary deferral allowed
- Additional $3,500 catch-up contribution (50 years or older)
- Post-tax (Roth) contributions are not available
Employer Contributions
Employer can either contribute:
- Mandatory 3% employer match – three out of five years (1% minimum required for other two years)
Or they can contribute:
- 2% non-elective employer contribution
- Additional employer contribution is not allowed
Maximum Annual Contribution Per Participant
- Employee: $15,500 (if 50 years or older, an additional $3,500 allowed)
- Employer: Must make matching contributions up to 3% of employee compensation or contribute 2% of total eligible employee compensation (Maximum compensation limit is $330,000 in 2023)
SEP IRA – Contribution Details
Who Can Contribute?
Employer
Employee Contributions
None—contributions are generally by employer only
Employer Contributions
Employer can decide whether to make contributions year-to-year
Maximum Annual Contribution Per Participant
Up to 25% of compensation (Maximum compensation limit is $330,000 in 2023), but no more than $66,000
For more information, see the comparison chart below:
