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Choosing a retirement plan for your business

Hiring and keeping the right employees is important to your business's success — and offering an attractive benefits package is a key part of recruiting and retaining the best people.

The information below provides an overview of small business retirement plans available through State Farm®.

Sole proprietors, partnerships, limited liability companies, Sub S Corporations, and C Corporations that do not employ any common-law employees have several options for business retirement plans. The business owner's spouse (if employed and compensated by the business) may also participate in these plans.

Individual 401k

For businesses with no common-law employees, these business retirement plans allow owners to maximize their contributions. Employer contributions are tax deductible (subject to applicable limits) to the business, and salary deferrals can be made on a pre-tax basis (which are excluded from income for federal income tax purposes) or as Designated Roth Contributions.

Learn more about Individual 401k

SEP IRA

Simplified employee pension (SEP) plans allow business owners to set aside money in a retirement account for themselves (and spouse, if applicable) subject to applicable limits. There are no administration costs, paperwork is minimal, and all contributions are tax deductible to the business.

Learn more about SEP IRA

SIMPLE IRA

Since an owner-only business is less than 100 employees, a business owner can establish a SIMPLE IRA (including a spouse). A business owner (and spouse) is able to defer a portion of his/her salary as pre-tax contributions and the business makes a tax-deductible matching or non-elective contribution. There are no administration costs and minimal paperwork.

Learn more about SIMPLE IRA

A 10% tax penalty may apply for withdrawals from tax-qualified products before age 59½.

Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

Securities distributed by State Farm® VP Management Corp.

BlackRock mutual funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). BlackRock is not affiliated with SFVPMC or any other entity mentioned herein. BlackRock is a registered trademark of BlackRock, Inc.

SFVPMC is a separate entity from Capital Research and Management Company (CRMC) which is the investment adviser for the American Funds. American Funds securities are distributed through American Funds Distributors, Inc. All Capital Group trademarks referenced are registered trademarks owned by The Capital Group Companies, Inc. or an affiliated company.

Neither State Farm® nor its agents provide tax or legal advice.

AP2024/03/0349