Business owners often focus on growth and reinvestment—but neglecting retirement planning can be a costly oversight. With 2025 contribution limits increased and new catch-up provisions in place, now is the time to act. This article from Comerica explores how to layer retirement plans, reduce taxes, and build long-term wealth.
Key takeaways:
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401(k) contribution limits for 2025 are now $23,500, with additional catch-up contributions up to $11,250 for ages 60-63.
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Solo 401(k)s and SEP IRAs allow business owners to contribute as both employer and employee, maximizing savings.
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Defined benefit and profit-sharing plans can further increase contributions for high-income owners.
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Tax credits and deductions are available for starting and funding retirement plans.
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As a business owner, you have more control over your retirement planning than most. But with that control comes complexity — and opportunity. The right strategy can help you reduce taxes, retain talent, and build long-term wealth.
1. Layering Plans for Maximum Impact
You may be eligible to contribute to multiple plans—such as a Solo 401(k), SEP IRA, and even a defined benefit plan. This can dramatically increase your annual retirement savings, especially if your income is high and consistent. For example, if you have one business that has a 401K, you can maximize your contributions to that plan. If you have a single-member LLC, you can also maximize contributions to a SEP IRA.
2. 2025 Contribution Limits
The IRS has increased contribution limits again. In 2025, you can contribute up to $23,500 to a 401(k), with an additional $11,250 catch-up if you’re between 60 and 63. Employer contributions can bring total plan funding over $70,000 in some cases.
3. Profit-Sharing and Defined Benefit Plans
For those seeking even higher contributions, profit-sharing and defined benefit plans can allow six-figure annual contributions. These plans are especially attractive for owners nearing retirement who want to accelerate savings.
4. Tax Credits and Incentives
New businesses may qualify for tax credits for starting a retirement plan. Additionally, contributions are generally tax-deductible, reducing your current-year tax liability while building future security.
This story was produced by Comerica and reviewed and distributed by Stacker.