Hiring has changed. So has keeping people.
Across industries and company sizes, employees are making decisions about where to work — and whether to stay — with a sharper eye on long-term financial stability than on short-term perks. According to research from Guideline, 93% of employees say retirement benefits influence their decision about whether to join a company.¹ Half of those surveyed said they would turn down a job offer from a company that didn’t offer one at all.¹
The cost of ignoring that signal is real. Research from Gusto found that offering a 401(k) plan can translate to more than $100,000 in annual savings from reduced employee turnover, and employees with access to a plan are roughly 32% less likely to leave in their first year on the job.²
Yet 40% of small businesses still don’t offer any retirement benefit at all.¹
So here’s the question that doesn’t come up often enough: What if the plan wasn’t just something you offered your employees — but something you needed just as much as they did?
For many business owners, a well-designed retirement plan is one of the most underused tools for building personal wealth. When it’s structured thoughtfully, it doesn’t just help attract and retain good people. It works for the owner, the team, and the business’s long-term financial picture all at once.
Why Most Plans Fall Short
There’s a version of a business retirement plan that exists mostly on paper. It gets set up, employees hear about it once during onboarding, and it runs quietly in the background doing the bare minimum.
That plan isn’t hurting anyone. But it isn’t doing much for anyone, either.
The gap between that version and a well-designed plan is substantial — in what employees actually experience, and in what the plan makes possible for the owner.
Business owners occupy a genuinely unique position when it comes to retirement savings. Unlike a W-2 employee who maxes out a 401(k) and moves on, an owner can shape the structure of the plan itself. Contribution limits, matching formulas, vesting schedules, plan type, profit-sharing provisions — all of it is configurable. Because owners typically earn more than most of their employees, the ability to maximize personal contributions through the right plan design becomes a meaningful tax and wealth-building tool.
Most of the time, owners don’t realize how much they’re leaving on the table.
What Plan Design Actually Means
Plan design isn’t a phrase most business owners spend much time with. But it’s where the real difference gets made.
The three most common plan types for businesses with employees each carry distinct tradeoffs:
SEP IRA — Simple and flexible, with no annual filing requirements. Employers can contribute up to 25% of employee compensation (or 20% for self-employed owners), up to $72,000 in 2026.³ Every eligible employee receives the same contribution percentage as the owner, which simplifies administration but limits how much personalization is possible.
SIMPLE IRA — Built for smaller teams, with lower employer contribution requirements and less administrative overhead. Employee contributions are capped at $17,000 in 2026.³ A solid starting point for many businesses, but not the most powerful structure for an owner looking to maximize savings.
Traditional 401(k) or Solo(k) — The most flexible option and, for owners focused on building personal wealth, typically the most powerful. For 2026, employee deferrals are capped at $24,500, and total combined contributions — including employer contributions — can reach $72,000.³ It’s also the only structure that allows vesting schedules on employer contributions (if applicable), which becomes a meaningful retention lever.
When employer contributions vest over time, the plan creates a direct financial incentive for employees to stay. That’s not incidental to the plan’s value — it’s a feature of the design.
Want to go deeper on how these three plan types compare? In our Beyond the Advisor podcast, I sat down with Nina Breen to walk through exactly this — including the moment when business owners typically realize that a SEP or SIMPLE IRA may be limiting their options. You can watch that conversation here: The Hidden Connection Between Business Decisions and Personal Wealth
A Closer Look at What’s Actually Possible
Consider a hypothetical company with twelve employees. The owner has been contributing to a SEP IRA for years. Because the SEP requires a uniform contribution percentage across all eligible employees, every dollar she puts in for herself flows proportionally to the team.
In a strong year when she wants to maximize her own retirement savings, the cost scales significantly with headcount. That math can quietly discourage owners from contributing as aggressively as they otherwise could — or from contributing at all in leaner years.
A plan redesign in this scenario might mean moving to a 401(k) with a profit-sharing provision. The owner can increase her own contributions without the same dollar-for-dollar obligation rippling across the entire team, while still offering employees a meaningful benefit tied to company performance.
That’s not a workaround. That’s what intentional plan design looks like in practice.
Why Employees Win Too
The best-designed plans genuinely deliver more to employees — not less. This isn’t a story about owners extracting value while the team gets the minimum.
While medical insurance holds the top spot as the most important benefit for employees (ranked first by 82% of workers), retirement savings plans have climbed to second place — tied with dental insurance for the first time ever, an increase of 11% over just two years.⁴ More than half of employees say they are staying in their current jobs specifically because of their benefits package, with robust retirement plans among the top three reasons cited.⁵
The way a plan gets communicated matters just as much as the structure itself. A plan that’s explained clearly at onboarding, revisited at annual reviews, and framed as part of total compensation is a completely different experience from one buried in a benefits document no one reads.
When employees feel genuinely cared for at work, they’re 17% more engaged, 17% more loyal, and 12% more productive than those who don’t share that experience.⁴ A retirement plan, done well, is one of the clearest signals a business can send that the relationship is built to last.
What to Think Through Before Designing Your Plan
No single plan design is right for every business. A few variables shape the conversation most:
Your workforce demographics. The age range and income levels of your team affect which plan features will be most valued and what nondiscrimination testing may require. A younger workforce might respond more to an employer match. A senior team approaching retirement may prioritize higher contribution limits above everything else.
Your own timeline and goals. How many years until you plan to step back from the business? What does your personal retirement income picture need to look like? These questions shape which plan structure makes sense — and how aggressively you should be using it now.
Your cash flow. Some plan designs require consistent employer contributions regardless of company performance. Others allow more flexibility. The plan needs to work with your business cycle, not create a compliance problem during a difficult quarter.
SECURE 2.0 provisions. Legislation passed in late 2022 introduced a range of incentives for small businesses adopting or improving retirement plans, including startup tax credits for new plans and credits for employer contributions.¹ These provisions have meaningfully changed the economics of offering a plan — particularly for businesses that previously viewed cost as the primary barrier.
The Gatewood Approach: Planning for Both Sides of the Table
Most advisory relationships focus on one side of this equation at a time. Either the conversation is about the business, or it’s about personal wealth. Rarely both simultaneously.
At Gatewood, we work with business owners across both dimensions because the decisions overlap. How your plan is designed affects your tax liability this year. It affects whether your best employees are still with you in three years. And it affects what your business looks like when the time comes to transition out of it.
Our team includes specialists in retirement planning, business owner wealth strategy, and financial planning — and they work together on your behalf rather than in silos. That’s what Firm-to-Family® looks like in practice: not just a philosophy, but a structure that makes sure the people advising you see the whole picture.
If you’ve never had a real conversation about what your retirement plan could be doing for you, or if it’s been a while since anyone looked at the design, we’d welcome the chance to walk through it together.
Schedule a conversation with our team today, and let’s take a closer look at what the right plan design could mean for you and your team.
Sources
- Guideline research as cited in Fortune, “93% of Employees Say Retirement Benefits Influence Whether They’ll Take a Job,” May 1, 2025 — https://fortune.com/article/employee-retirement-plan-ira-401k/
- Gusto research as cited in The Pew Charitable Trusts, “Small Employers’ Economics of Offering Retirement Savings Plans,” 2024 — https://www.pew.org/en/research-and-analysis/issue-briefs/2024/07/small-employers-economics-of-offering-retirement-savings-plans
- IRS, “401(k) Limit Increases to $24,500 for 2026,” IRS Notice 2025-67 — https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
- ADP, “2025 Employee Benefits Trends” — https://www.adp.com/resources/articles-and-insights/articles/e/employee-benefits-trends.aspx
- Payroll Integrations, “2025 Employee Financial Wellness Report,” as cited in 401(k) Specialist, March 2026 — https://401kspecialistmag.com/solid-benefits-led-by-health-retirement-keep-most-employees-at-current-job/
- Guideline as cited in Fast Company, “The Future of Benefits Is Hiding Where You Might Not Expect It,” March 2025 — https://www.fastcompany.com/91301047/the-future-of-benefits-is-hiding-where-you-might-not-expect-it
Important Disclosures:
This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.
