Business owners often focus on growth and reinvestment—but neglecting retirement planning can be a costly oversight. With 2025 contribution limits increased and new catch-up provisions in place, now is the time to act. This fourth article in our retirement series explores how to layer retirement plans, reduce taxes, and build long-term wealth.
Key takeaways:
- 401(k) contribution limits for 2025 are now $23,500, with additional catch-up contributions up to $11,250 for ages 60–63.
- Solo 401(k)s and SEP IRAs allow business owners to contribute as both employer and employee, maximizing savings.
- Defined benefit and profit-sharing plans can further increase contributions for high-income owners.
- Tax credits and deductions are available for starting and funding retirement plans.
As a business owner, you have more control over your retirement planning than most. But with that control comes complexity - and opportunity. The right strategy can help you reduce taxes, retain talent, and build long-term wealth.
1. Layering Plans for Maximum Impact
You may be eligible to contribute to multiple plans—such as a Solo 401(k), SEP IRA, and even a defined benefit plan. This can dramatically increase your annual retirement savings, especially if your income is high and consistent. For example, if you have one business that has a 401K, you can maximize your contributions to that plan. If you have a single member LLC, you can also maximize contributions to a SEP IRA.
2. 2025 Contribution Limits
The IRS has increased contribution limits again. In 2025, you can contribute up to $23,500 to a 401(k), with an additional $11,250 catch-up if you’re between 60–63. Employer contributions can bring total plan funding over $70,000 in some cases.
3. Profit-Sharing and Defined Benefit Plans
For those seeking even higher contributions, profit-sharing and defined benefit plans can allow six-figure annual contributions. These plans are especially attractive for owners nearing retirement who want to accelerate savings.
4. Tax Credits and Incentives
New businesses may qualify for tax credits for starting a retirement plan. Additionally, contributions are generally tax-deductible, reducing your current-year tax liability while building future security.
Don’t leave retirement savings on the table
Contact your Comerica relationship manager or one of our many retirement specialists and coordinate with your CPA or financial advisor to design a retirement strategy tailored to your business.
Subscribe now so you don't miss out on our upcoming series on retirement strategies including ROTH conversions and other options for maximizing your savings.
NOTE: IMPORTANT INFORMATION
Comerica Wealth Management consists of various divisions and affiliates of Comerica Bank, including Comerica Bank & Trust, N.A. and Comerica Insurance Services, Inc. and its affiliated insurance agencies. Non-deposit Investment products offered by Comerica and its affiliates are not insured by the FDIC, are not deposits or other obligations of or guaranteed by Comerica Bank or any of its affiliates, and are subject to investment risks, including possible loss of the principal invested. Comerica Bank and its affiliates do not provide tax or legal advice. Please consult with your tax and legal advisors regarding your specific situation.
This is not a complete analysis of every material fact regarding any company, industry or security. The information and materials herein have been obtained from sources we consider to be reliable, but Comerica Wealth Management does not warrant, or guarantee, its completeness or accuracy. Materials prepared by Comerica Wealth Management personnel are based on public information. Facts and views presented in this material have not been reviewed by, and may not reflect information known to, professionals in other business areas of Comerica Wealth Management, including investment banking personnel.
The views expressed are those of the author at the time of writing and are subject to change without notice. We do not assume any liability for losses that may result from the reliance by any person upon any such information or opinions. This material has been distributed for general educational/informational purposes only and should not be considered as investment advice or a recommendation for any particular security, strategy or investment product, or as personalized investment advice.