2025 Pension Plan Comparison Chart
Choosing the right retirement plan can feel overwhelming, especially with so many options available for business owners, self-employed individuals, and employees alike. Each plan type—SIMPLE IRA, SEP IRA, Solo 401(k), and a standard 401(k)—offers unique benefits, contribution limits, and tax advantages. To help you compare, we’ve outlined the key features of each plan for 2025 in a side-by-side chart, making it easier to see which option may fit your needs best.
New Tax Benefits and Deductions Under the OBBBA (2025)
| Feature | SIMPLE IRA | SEP IRA | Solo 401(k) | Standard 401(k) |
|---|---|---|---|---|
| Who It’s For / Highlights | Small employers (≤100 employees) or self-employed; easy to set up; employer must contribute. | Any size business or self-employed; only employer contributions; high limits; easy to administer. | Business owners with no employees (or just spouse); allows both employee and employer contributions; very high limits. | Employers of any size; most common plan; often includes employer match and Roth option. |
| Max Employee Contribution (2025) | $16,500 Age 50+ catch-up: $3,500 Ages 60–63 “super catch-up”: $5,250 |
N/A (employees don’t defer; only employer contributes) | $23,500 Age 50+ catch-up: $7,500 Ages 60–63 “super catch-up”: $11,250 |
$23,500 Age 50+ catch-up: $7,500 Ages 60–63 “super catch-up”: $11,250 |
| Max Employer Contribution (2025) | Must contribute either: • 3% match of compensation, or • 2% non-elective for all eligible employees |
Up to 25% of compensation (or adjusted net self-employment income) | Up to 25% of compensation (self-employed use adjusted net earnings formula) | Typically up to 25% of compensation (profit-sharing or match, subject to plan rules) |
| Max Total Contribution (All Sources, 2025) | Employee + employer contributions limited to ~ $16,500 + employer match/non-elective (plus catch-ups). For age 60–63: up to ~$21,750 with super catch-up. | $70,000 (lesser of $70,000 or 25% of comp) | $70,000 (plus catch-ups: up to $81,250 with age 60–63 super catch-up) | $70,000 (plus catch-ups: up to $81,250 with age 60–63 super catch-up) |
| Tax Deduction for Contributions | Employee deferrals reduce taxable income; employer contributions deductible. | Employer contributions deductible. | Employee deferrals pre-tax (or Roth if allowed); employer contributions deductible. | Same as Solo 401(k). |
| Are Withdrawals Taxed? | Yes, as ordinary income (unless Roth SIMPLE is used and qualified). | Yes, as ordinary income. | Yes, for pre-tax contributions; Roth contributions tax-free if qualified. | Same as Solo 401(k). |
| Are Earnings Taxed Annually? | No, grow tax-deferred. | No, grow tax-deferred. | No, grow tax-deferred (Roth portion tax-free if qualified). | No, grow tax-deferred (Roth portion tax-free if qualified). |
| Contribution Deadlines (2025) | • Employee contributions: by 12/31/2025 • Employer contributions: by tax filing deadline, incl. extensions |
By employer’s tax filing deadline, incl. extensions | • Employee deferrals: must be made by 12/31/2025 • Employer contributions: by tax filing deadline, incl. extensions |
• Employee deferrals: by 12/31/2025 • Employer contributions: by tax filing deadline, incl. extensions |
Key Takeaways for Pension Plans in 2025:
SIMPLE IRA → Easy, lower limits, mandatory employer contribution.
SEP IRA → Employer-only funding, very high limits, great for self-employed with no employees.
Solo 401(k) → Best for self-employed wanting to maximize savings; allows both employee + employer contributions.
401(k) → Traditional workplace retirement plan; higher admin but flexible and widely available.