Are You Building Everything Except Your Retirement?
If you don’t have a retirement plan for your employees, you may be missing the boat. And if you’re an employee working for a company that doesn’t offer one, you could be missing out on an important opportunity to build your retirement savings.
For business owners, a retirement plan isn’t just about helping your employees save for the future. It can also be an important tool for your own retirement strategy. It also helps solve one of the biggest issues I hear when from members…employee retention.
For the MBCEA community, this topic is personal to me. My dad is a steel erector and has been involved with MBCEA for years, so I’ve seen firsthand how hard the people in this industry work to build successful businesses.
The question I hear from business owners isn’t usually whether retirement planning is important. It’s where do I start, and which type of plan actually makes sense for my business?
There are a number of options, but three of the most common for small businesses are SIMPLE IRAs, SEP IRAs, and 401(k)s. Let’s break down how each one works. Side note…I also hear a lot of chatter about ESOPs from this group…but there is a lot of misinformation on that as well.
SIMPLE IRA
SIMPLE stands for Savings Incentive Match Plan for Employees. It's a traditional IRA established for employees that allows both employees and employers to contribute.
Employees can make salary reduction contributions directly to their accounts, while employers can choose between making a matching contribution or making nonelective contributions.
For a smaller business that wants to offer a retirement plan, a SIMPLE IRA may be an option worth considering. Some small-business owners choose SIMPLE IRAs because they find the maintenance costs are lower compared with other retirement plans.¹
Generally, a business must have fewer than 100 employees to use a SIMPLE IRA and cannot have another retirement plan in place.¹
Distributions are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, required minimum distributions begin once you reach age 73.
SEP IRA
A SEP IRA, or Simplified Employee Pension plan, is another option available to businesses of any size, including self-employed business owners.²
Unlike a SIMPLE IRA, a SEP IRA is funded solely by the employer. Employees don't make their own contributions, and the employer must contribute the same percentage for each eligible employee.
One of the biggest differences is flexibility. Employer contributions can change from year to year, which may be helpful for businesses where cash flow fluctuates. SEP IRAs also generally don't have the same start-up and operating costs associated with conventional retirement plans.²
Distributions are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, required minimum distributions begin at age 73.
401(k)
The 401(k) is probably the option most business owners and employees are familiar with.
401(k) plans are funded by employee contributions and, in some cases, employer contributions as well.
For a business owner, a 401(k) is another option to consider when looking at how to help employees save for retirement while also thinking about your own long-term retirement strategy.
In most circumstances, required minimum distributions from a 401(k) or other defined contribution plan begin in the year you turn 73. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.¹
The Bigger Question
The question isn't necessarily “Which retirement plan is best?”
It's “Which retirement plan makes the most sense for my business?”
That answer can look different from one company to another. You have to consider your employees, your cash flow, your goals as an owner, and what you're ultimately trying to accomplish with the plan.
And if you already have a retirement plan, it's still worth asking whether the plan you put in place years ago continues to make sense for the business you have today.
That's one of the reasons I enjoy working with business owners, and particularly why I value my relationship with MBCEA. I understand that these businesses weren't built overnight. I've watched my dad work in this industry for years, and I've seen the amount of work that goes into building and running a successful company.
My role is simply on a different side of the table: helping business owners make thoughtful decisions about the financial pieces that go along with everything they've built.
If you have questions about your current retirement plan…or you're trying to figure out where to start…call me. It’s just a conversation and I will likely leave you better that I found you. Sometimes the first step is simply understanding what you have today and whether it still makes sense for where your business is headed.
Before implementing or modifying a retirement plan, work with your tax, legal, and accounting professionals to determine what is appropriate for your specific situation.
Learn more about MBCEA membership and read additional business management articles.
Shannon Fowler
Private Wealth Advisor
IronBridge Wealth Counsel, LLC
636-299-8558 Mobile
Shannon.Fowler@IronBridgeWC.com
IronBridgeWC.com
Sources
1. IRS.gov, 2026
2. Investopedia.com, November 27, 2025
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