When you worked for someone else, you were probably more focused on the free coffee, office cafeteria and camaraderie than the actual benefits, like that health insurance and 401(k) plan.

Now that you’ve branched off on your own and become a business owner, you realize just how important those benefits are — both to yourself and to any employees you hire. Not only do you need to stay on track with your own goals like retirement, you’ve also got to keep your workers happy and remain competitive as an employer.

If you haven’t taken advantage of the many benefit options for business owners, check out our go-to guide.


    This is an important one, since an employer-sponsored retirement plan is how a lot of people even think to save in the first place. There are several types of retirement plans available for the self-employed or small-business owners, but here are three of the most common:

    Solo/Individual 401(k) Plan: Also known as the one-participant 401(k), this plan provides the tax perks of a regular 401(k), but is designed for a solopreneur. The beauty of it is that your contributions can exceed what’s allowed for employer-sponsored 401(k)s because you can contribute as both the employer and employee. In 2017, that means you can put in $18,000 a year (or $24,000 if you’re 50 and older) as the employee, and as the owner you can put in a percentage of your income — which varies based on how your company is set up — up to a total of $54,000 ($60,000 if you’re 50 or older).

    Simplified Employee Pension (SEP) IRA: This option can help both you and your employees save for retirement. It’s preferable to a traditional or Roth IRA because it lets you set aside more of your income, similar to a solo 401(k). With a SEP IRA, you can also save up to 25 percent of your net earnings, up to a max of $54,000 a year. An IRA limits you to $5,500 (or $6,500 if you’re 50 or older).

    If you’re thinking of establishing a SEP IRA for your employees, there are a couple of things to keep in mind: One, they can’t contribute to their own SEP IRA, so the account would only be funded by you. Two, you have to contribute the same percentage for everyone in your company who has a SEP IRA, including you. So that means you can’t fund yours with 25 percent of your net earnings and contribute only 10 percent to your employees.

    Savings Incentive Match Plan for Employees (SIMPLE) IRA: A SIMPLE IRA is another option for both you and your workers, but employees are allowed to contribute to their accounts by making “salary reduction contributions” — i.e., they can elect to have you put a percentage of their salary into the SIMPLE IRA. The max amount an individual can contribute to a SIMPLE IRA in 2017 (whether boss or employee) is $12,500 of net earnings, plus an extra $3,000 for those 50 and older.

    As an employer, you must either match your employee’s contributions dollar-for-dollar up to 3 percent of their salary, or you can opt to make a fixed contribution of 2 percent of your employee’s pay. Those two options also exist for you, the business owner, which means you’re able to save beyond the $12,500 annual limit. You just have to make sure that you’re contributing the same amount (either the 3 percent matching or 2 percent fixed contribution) to your account that you offer to your employees.


    Under the Affordable Care Act, companies with fewer than 50 employees aren’t required to provide health insurance, but giving workers that option could help you keep them for the long haul: A 2015 study by the Society for Human Resource Management found that health benefits were, by far, the biggest benefits draw when it came to recruiting and retaining employees.

    A lot of the reason small business owners may not offer health insurance is the cost, but there are a variety of options to look into, including:

    • Health reimbursement accounts, in which you’d make contributions to an account that can be used by an employee to help pay for individual health insurance policies they get on their own.
    • Shopping for a small group health insurance plan via HealthCare.gov’s SHOP Marketplace. You can also see if you’d be eligible for business tax credits.
    • Shopping for a small group plan on the private marketplace.
    • Contributing to the cost of health insurance that employees purchase themselves on a private health exchange, which provides them with a menu of plan options from one carrier or several carriers.

    Not only do you need to stay on track with your own goals like retirement, you’ve also got to keep your workers happy and remain competitive as an employer.

    Of course, trying to decide on the best plan for your company and keeping track of all the rules is enough to make your head spin, so consider turning to a broker or benefits consultant to help you compare your options.


    Protecting lost income in the event of your death or illness is important no matter what, but it can seem doubly so when you have family, employees and business partners to think about.

    Life insurance can not only help replace your lost income for your family after you die, but your death benefit can help pay for any business-related loans that may have used your family’s assets as collateral. Also, if your business is owned by several people, the partners can take out life insurance policies on each other to fund a buy-sell agreement. This is when the surviving partners agree to use the death benefit from an insurance policy to buy out the deceased partner’s share of the company.

    Disability income insurance, meanwhile, is used to help replace a portion of a person’s pay in the event they become ill or injured and can’t work, so it’s another way to help protect both you and your employees’ incomes. On top of that, business owners with partners can use disability buyout insurance to buy out their co-owner’s share of the company in case of a long-term illness.

    With both types of insurance, buying a group policy is likely to be cheaper per person than buying an individual policy and — big plus — you and your employees may not need the detailed health screenings that are required when buying individual policies.

    Again, as with other small-company benefits, it’s worth working with a benefits consultant to help navigate what type of life and disability income insurance options are a good fit. But consider it a good move for both you and your budding business.

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