A cross-tested 401K plan enables employers to define classes of employees and provide a specific percentage for profit-sharing contributions for each class. This type of plan allows businesses to allocate a higher contribution rate to owners and other key personnel.

A cash balance plan is a defined benefit (DB) plan that provides participants benefits through a “hypothetical” account that makes it look more like a profit-sharing plan. This type of plan is great for companies looking to contribute higher amounts for owners and key personnel into a tax-deferred plan than allowed in a stand-alone 401(k) profit-sharing plan.

A SIMPLE (Savings Incentive Match Plan for Employees) IRA Plan is a retirement savings plan that enables employers and employees to contribute to traditional IRAs. This type of plan may be suitable for very small businesses looking for an inexpensive plan to set up and operate; however, a SIMPLE IRA has lower contribution limits and less flexibility than a custom designed 401(k) profit-sharing plan.

A SEP (Simplified Employee Pension) IRA plan is an employer-contribution-only plan that allows businesses to set aside money in retirement accounts for owners and employees. A SEP has higher contribution limits than a SIMPLE IRA, but employers must contribute equally to all employees and employees cannot contribute to the plan.