The purpose behind having your own personal retirement plan is a method to fund your retirement. Tax law allows you to do so in ways that are tax advantaged. You may qualify to participate in certain retirement plans that are available to small business owners, depending on certain factors, such as your business' form of organization, other retirement plans in which you already participate, the amount of your earned income and whether you are functioning as an employer (owner) or an employee of your business.

The following are selected examples of the types of retirement plans that can be used by small business owners, plus some of the features of each type:

1. Traditional IRA: Invest up to $4,000 annually; the dollars contributed are tax deductible and grow tax deferred – until you retire
2. Roth IRA: Invest up to $4,000 annually; the dollars contributed are after-tax and grow tax- free, indefinitely.
3. SIMPLE IRA: A SIMPLE IRA is a salary- reduction retirement plan that qualifying small employers may offer their employees. Salary- reduction contributions of $10,000 per year may be made by eligible employees, and their employers are required to make matching contributions or a flat contribution.
4. Simplified Employee Pension (SEP): A SEP IRA is a retirement plan into which the employer makes contributions on behalf of each employee. The amount of annual contributions allowed per eligible employee is the lesser of 25% of employee compensation up to $210,000, or $42,000 – up to the extent of each employee's compensation.
5. Self-employed 401(k): Two components comprise the Self-employed 401(k) plan contribution: an owner/employee salary deferral contribution up to a maximum of $14,000 and an employer profit sharing contribution up to a maximum of $42,000, or a combination of both – up to a limit of $42,000.
6. Regular 401(k): Contributions are made by the employer, using a salary deferral, up to $14,000 annually, up to the extent of the employee's compensation, plus the employer can also make a contribution (on behalf on each eligible employee) of the lesser of $42,000 or 25% of the employee's compensation up to $210,000.
7. KEOGH–Defined Contribution: The maximum contribution that can be made into a Defined Contribution Keogh retirement plan is the lesser of 100% of compensation up to $210,000, or $42,000. This total contribution can be made in two ways: #1: a Profit Sharing contribution, plus #2: a Money Purchase contribution, the total of which may not exceed the lesser of 100% of compensation up to $210,000, or $42,000 – annually.
8. Solo-DB (Individual Defined Benefit): A Solo-DB is a defined benefit retirement plan with a maximum annual contribution of $170,000, or more. The Solo- DB plan is designed for business owners with no employees, unless the employees are partners in the business or the spouses of the owners.
9. Keogh – Defined Benefit: The maximum contribution that can be made into a Defined Benefit Keogh retirement plan is determined actuarially in such a manner so as to create a plan that has an adequate amount of dollars in the plan (at the time of your retirement) sufficient enough to pay a specific (defined) benefit to you upon your retirement.

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