Most Common Retirement Plans

SEPs, SIMPLEs, and 401(k)s

Selecting the right retirement plan is a critical decision that can significantly impact financial growth.

With options like SEP IRAs, SIMPLE 401(k)s, and 401(k) Profit Sharing plans available, navigating the differences between them can be complex.

The table below outlines the key distinctions:

SEP IRA	SIMPLE 401(k)/IRA	401(k) Profit Sharing
Only employer contributions	Both employees and employers can contribute	Both employees and employers can contribute
$72,000 employer contribution limit	$17,000 employee contribution limit	$24,500 employee contribution limit
Participants are 100% vested starting day one	Participants are 100% vested starting day one	Graded vesting schedule and can be discretionary
No catch-up contribution	$4,000 catch-up contribution limit (age 50-59 or 64+)	$8,000 catch-up contribution limit (age 50-59 or 64+)
No super catch-up contribution	$5,250 super catch-up limit (age 60-63)	$11,250 super catch-up limit (age 60-63)
Owners are limited to 25% of their W2 wages	Required employer contribution	Utilize Profit Sharing to maximize employer contribution

Total potential plan assets to manage (per participant):

SEP IRA

SIMPLE 401(k)/IRA

401(k) Profit Sharing

25% of Compensation

(maximum $72,000)

$21,000 in Deferrals

(includes catch-up)

$80,000 with Profit Sharing

(includes catch-up)

At Trinity, we make complex pension concepts simple, and our seamless conversion process creates a smooth transition. Every client has access to a dedicated Relationship Management team to provide clear and consistent communication.

Plus, our standard services include preparing and signing the Form 5500 and all amendments providing the convenience and protection your business owner clients want. With Trinity, every client’s plan is tailored to truly fit their business needs and goals from service to plan design.

Expand service offerings and strengthen client relationships with 401(k) Plans.