On Money & More – July 2025

NEARLY ALL the businesses operating in Jacksonville are small businesses. That’s not unique—in fact there are over 33 million small businesses in the U.S. that employ roughly 60 million people (and account for 99% of the firms in the country!). Many business owners pour everything into their business and leave their retirement plan as an afterthought. But with the right approach, the value of your business can be a portion of your retirement assets, and you can still fund a retirement plan.

These summer months are ideal to get your retirement ducks in a row. You’re far enough into the year to have a sense of your income, but still early enough to adjust contributions or set up a new plan.

Here are some top opportunities to consider:

  1. Solo 401(k): Best for High Savers and Spouses—If you’re self-employed with no employees, a Solo 401(k) allows you to contribute both as the employer and the employee. In 2025, you can contribute:

Up to $23,000 as employee deferral (plus a $7,500 catch-up if you’re 50+)

Up to 25% of net self-employment income as an employer

Total cap: $69,000 (or $76,500 with catch-up)

You can choose between pre-tax or Roth contributions for the employee portion—a powerful tax planning lever. And if your spouse works in the business, they can also contribute.

  1. SEP IRA: Simpler Setup, Strong Deduction—The SEP IRA is easier to set up and maintain. You can contribute up to 25% of compensation, or up to $69,000 in 2025. It’s flexible—you can fund it up to your tax filing deadline (including extensions)—and there is no annual reporting requirement. But there are also some downsides. There is no Roth option, and you can’t make employee-style deferrals.
  2. 401(k): Team-Friendly and Tax-Efficient—Ready to offer a true benefit package for your employees? A 401(k) allows for employee deferrals and (potentially) employer matches.

Employees can contribute up to $23,000 (plus $7,500 catch-up for those 50 and over)

Employer match: typically, 3% of pay or 4% with a tiered formula, but not required

You still get to max out your own contributions, if desired

This is great for small business owners that want to attract or retain talent and reward themselves, too. If you are starting a plan in 2025, there are also significant tax incentives that can make it very attractive for your P&L (possibly offsetting your startup costs).

Which to Choose?—Choosing the right retirement plan can be a complex. Each option carries its own benefits, and the costs for setting up each plan vary based on the specifics of your situation. Cutler manages dozens of retirement plans for our clients throughout the country. If you’d like to talk with someone at Cutler about which plan might be the right fit, let us know. We’d be happy to chat.

All opinions and data included in this commentary are as of June 15, 2025 and are subject to change without notice. The opinions and views expressed herein are of Cutler Investment Counsel, LLC and are not intended to be a forecast of future events, a guarantee of future results or individual investment advice including the asset allocation provided. Nothing herein should be construed as tax advice. This article is provided for informational purposes only and should not be considered a recommendation or solicitation to purchase or sell securities. This information should not be used as the sole basis to make any investment decision. The statistics have been obtained from sources believed to be reliable, but the accuracy and completeness of this information cannot be guaranteed. Investing involves risk, including the potential loss of principle. Neither Cutler Investment Counsel, LLC nor its information providers are responsible for any damages or losses arising from any use of this information.