2026 Quick Facts

Annual Limit $72,000 (or 25% of compensation)
Contribution Range 0% to 25% — fully discretionary each year
Flexibility High — employer decides annually

This very flexible type of plan allows a discretionary contribution of up to 25% of pay - or as little as 0%. There are many formulas for determining how the contributions get allocated to participants, including "new comparability" formulas that favor business owners who are generally older than rank and file employees.

Money Purchase Plan
401(k)

Defined Contribution Plans

Defined Benefit Plan

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