Fall Forward: Strategies for the Season | Wealth Planning Update

It’s clear from the growing numbers of business applications in the United States that entrepreneurship is on the rise. From June to July in 2026, applications were up 8.1%, nearly reaching 579,000.

Launching a business, whether as a secondary revenue stream or a full-time endeavor, is filled with countless decisions. While inspiration might be the starting point, there are several key steps to take that improve your odds of success and to keep your financial picture at the forefront.

We’ve crafted best practice action items that can help provide structural planning guidance.

Choose a Business Structure:

Sole proprietorship, partnership, limited liability company (LLC), S-Corp, or C-Corp are all potential options. Looking at liability exposure, tax treatment, and growth plans are critical as you assess what is right for you. Your wealth advisor, in partnership with your tax and legal advisors as well as insurance agent, can share further details about what the right structure could be for you, depending upon your assets, goals, and long-term financial plan.

File the Necessary Paperwork:

• Register your business’s name with the Secretary of State
• File a DBA (“doing business as”) if you plan to operate under a different name.
• Request an EIN from the IRS to start separating your business structure from your personal assets
• Register for state and local taxes
• Apply for the licenses and permits necessary for federal, state, and local laws based on your industry

These endeavors can monopolize your time, and understandably so; roughly half of new businesses don’t reach the five-year mark, and the work you put in early is what beats that statistic. But one thing shouldn’t get lost in the scramble: your own retirement savings.

The tools available to you are driven by the type of business, its trajectory, and your number of employees. At a basic level, SEP IRAs, solo 401(k)s, pooled employer plans (PEPs), employer-sponsored 401(k)s, and cash balance plans are a few of the potential retirement plans structures that are available.

Four Ways to Fund Your Retirement Through Your Business

SEP IRA

• The simplest plan to open, and the only one you can still set up after the tax year has closed – as late as your filing deadline, extensions included. The business funds it entirely; employees never contribute from their own paychecks.
• You can put in up to 25% of compensation, capped at $72,000 for 2026. If you’re a sole proprietor, that works out to roughly 20% of your net self-employment earnings. There’s no catch-up contribution at 50 or older, no loans, and Roth is technically permitted but almost never offered.
• The catch: every eligible employee receives the same percentage of pay you take for yourself. Excellent for a one-person shop, expensive once you have staff.

Solo 401(k)

• Built for a business with no employees other than you and your spouse. You contribute in two capacities at once – $24,500 of salary deferral plus an employer contribution – up to $72,000 combined, or $80,000 at age 50-plus and $83,250 at ages 60 through 63.
• Because the deferral isn’t tied to a percentage of pay, it beats a SEP at ordinary income levels. On $150,000 of self-employment profit, a SEP allows about $27,900; a solo 401(k) allows about $52,400.
• You also get Roth contributions and the option to borrow against your balance, and the paperwork stays light – no annual filing until plan assets exceed $250,000 (Form 5500-EZ).

*Once you have an eligible employee, a solo 401(k) is off the table, and a SEP would require you to fund that employee at your own contribution rate.

Pooled Employer Plan (PEP)

• A single, professionally run 401(k) that many unrelated small businesses join together, which buys you institutional pricing and investment lineups without building a plan from scratch.
• The pooled plan provider acts as the plan administrator and fiduciary: one Form 5500 covers every participating employer, and the provider runs compliance testing and handles any audit.
• As the business owner, you retain two real duties. The first is prudently selecting and monitoring the plan provider and submitting accurate payroll data and contributions on time.
• Best fit for a business with employees but nobody in-house to run a plan.
• The trade-off is customization: you operate within the provider’s design menu and calendar.

Employer-Sponsored 401(k)

• Your own standalone plan, and the only option with full design control – match formula, vesting schedule, eligibility rules, investment menu, and how employer contributions get allocated.
• This control is the reason to choose it. A cross-tested or new comparability design can legitimately direct more of the employer’s money toward owners and key employees, something a SEP simply cannot do.
• It’s also the most cost and the most work: your own Form 5500 each year, annual non-discrimination testing unless you adopt a safe harbor design, a plan audit once you reach roughly 100 participants, and fiduciary responsibility that stays with you.

In recent years, more states have passed legislation requiring businesses to provide retirement benefits for their employees. In these states, employers have the choice between enrolling their workers in the state-sponsored program or establishing their own workplace retirement plan through providers.

Approximately 15-20 states either require that employers utilize their state sponsored program or are passing legislation to do so, and the state-sponsored plan usually involves an Individual Retirement Account (IRA) set up by the employer to which participants can contribute. The ceiling is the IRA limit – $7,500, or $8,600 at 50 or older – against $72,000 in any of the four plans above. Also, these are not eligible for a business deduction, and no tax credits are available.

Our team can assist you in thinking through these structures so they work best for you and your employees.

As always, feel free to reach out to your advisor if you’d like to walk through which combination makes sense for your situation. Our entire team is here to support you with any questions about your portfolio or holistic wealth planning strategy.

We hope this wealth planning update has been helpful. If you’d like to revisit planning with our team, please don’t hesitate to reach out. If you think this update would benefit a colleague, friend, or family member, please feel free to share it. If you have a friend or family member who is interested in a no-cost portfolio review, please let us know.

Thank you again for your continued vote of confidence in our work.

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