The Ultimate Guide to Company Retirement Plans (Financial Advisor)

Most executives and business owners are leaving serious money on the table with their company retirement plans not because they’re neglectful, but because no one ever connected the dots between plan design, tax rules, and their actual goals. In this episode, Dan Pasone breaks down 401(k), 403(b), 457(b), SIMPLE IRA, SEP IRA, and cash balance options into clear “lanes” you can actually use.

You’ll learn how to choose the right chassis for your situation, when to graduate from starter plans, and how recent SECURE 2.0 changes (auto-enrollment, part-time eligibility, Roth catch-ups) can either work for you or against you. The goal: turn your company retirement plan into a real wealth-building engine instead of a confusing compliance checkbox.

• Your plan wasn’t designed just for you. Most company plans are built for broad adoption, admin simplicity, or maximum owner savings not your specific goals. Your job is to understand which “lane” you’re in and optimize within that system.
• Think lanes first, products second. Private sector employees live in the 401(k) lane; public sector and education in the 403(b)/457(b) lane; and business owners in the SIMPLE, SEP, 401(k), profit sharing, and cash balance lane. Clarifying your lane makes the alphabet soup finally make sense.
• For high earners, design beats default. Features like Roth contributions, mega backdoor Roth, profit sharing, and cash balance plans can dramatically increase tax-advantaged savings when structured intentionally.
• Starter plans are bridges, not destinations. SIMPLE and SEP IRAs are great for early-stage or very small teams, but as payroll and headcount grow, they often limit owner and staff savings and need to be upgraded to a safe harbor 401(k) structure.
• Government 457(b) plans are a hidden gem. For eligible public employees, 457(b) contributions stack on top of 401(k)/403(b) limits and often allow penalty-free distributions doubling tax-advantaged savings when coordinated well.
• SECURE 2.0 changed the rules. Auto-enrollment, expanded part-time eligibility, Roth-only catch-ups for high earners, and no lifetime RMDs on Roth accounts in employer plans create both new planning opportunities and new compliance requirements.
• Purpose → People → Plan. Start with your purpose (owner-focused savings, broad employee benefit, or both), then map people (eligibility, auto-enroll, vesting, testing), and only then fine-tune investments, education, and ongoing communication.

• 00:00 – Why most leaders leave six figures on the table. Dan opens with the gap between what plans could do and what they actually do for busy professionals.
• 00:42 – “Your plan wasn’t built for you.” How company plans get chosen (broad adoption, admin ease, owner savings) and why that matters.
• 01:08 – The lane concept. Private sector 401(k)s vs. public/education 403(b) + 457(b), and why thinking in lanes simplifies decisions.
• 01:50 – 401(k) basics done right. Pre-tax vs. Roth, tax diversification, and the mega backdoor Roth opportunity if your plan allows after-tax in-plan conversions.
• 02:16 – Age 55 separation rule & Roth RMD change. Using the age-55 rule for hybrid retirement and why Roth accounts inside plans no longer have lifetime RMDs.
• 03:16 – Business owners: safe harbor, profit sharing, and auto features. How 401(k) design can favor owners while staying compliant and supporting the team.
• 04:29 – Starter plans: SIMPLE and SEP IRAs. When these lightweight designs shine and when they start holding a growing business back.
• 05:37 – Cash balance plans as “deduction accelerators.” When pairing cash balance with 401(k) profit sharing can supercharge tax-deferred savings for owners.
• 06:00 – 403(b) nuances & 15-year service catch-up. Why tenure can create extra savings room, and why ERISA status matters.
• 06:47 – Government 457(b) superpowers. Separate deferral limits, no 10% early withdrawal penalty, and the three-year catch-up feature.
• 07:12 – Non-governmental 457(b) warning. Why these plans are tied to employer credit risk and don’t behave like a 401(k).
• 07:32 – SECURE 2.0 rule shifts. Auto-enrollment requirements, expanded part-time eligibility, and Roth catch-ups for high earners.
• 08:35 – Client story: upgrading from SIMPLE IRA to safe harbor 401(k). How one firm increased owner and staff savings and made the plan a talent magnet.
• 09:51 – Top 5 mistakes Dan sees every week. From missing the separate 457(b) limit to assuming Roth in plans is income-limited.
• 11:04 – The 3-step design framework. Purpose → People → Plan as a checklist for building the right structure.
• 11:54 – What to do this week (employees & owners). Concrete next moves inside your portal or with your advisor.
• 12:39 – Recap and next steps. Making benefits a real wealth engine instead of a confusing alphabet soup.

In this episode, Dan Pasone tackles one of the most under-optimized areas of many executives’ and business owners’ financial lives: their company retirement plans. He starts with a simple observation most plans weren’t built for you. They were chosen for broad enrollment, administrative ease, or maximum owner savings. That’s why the first shift is to think in “lanes”: private sector employees mostly live in the 401(k) lane, public and education professionals live in the 403(b) + 457(b) lane, and owners operate in the SIMPLE, SEP, 401(k), profit sharing, and cash balance lane.

Dan breaks down how a well-designed 401(k) can combine pre-tax and Roth savings, mega backdoor Roth (if allowed), safe harbor testing relief, and profit sharing to dramatically increase tax-advantaged savings. He explains why starter options like SIMPLE and SEP IRAs are fantastic bridges for small teams but can start to choke owner savings as payroll grows. For owners with strong, predictable cash flow, he introduces cash balance plans as “deduction accelerators” that can allow six-figure annual contributions when paired with a 401(k) profit sharing design if they’re implemented thoughtfully.

On the public side, Dan compares 403(b) and governmental 457(b) plans, highlighting unique catch-ups, separate deferral limits, and penalty-free distribution rules that can effectively double tax-advantaged savings when coordinated. He also warns against treating non-governmental 457(b)s like 401(k)s because of their employer-credit risk. Throughout, he weaves in SECURE 2.0 updates auto-enrollment requirements, expanded long-term part-time eligibility, Roth catch-ups for high earners, and the elimination of lifetime RMDs for Roth balances in employer plans and explains how they change the playbook.

Dan closes with a simple framework: Purpose → People → Plan. Decide whether your top priority is owner-focused savings, broad employee benefit, or both. Then map eligibility, auto-enrollment, vesting, and testing. Only after that do you refine investments, education, and communication. The end result is a plan that fits your business, supports your people, and actually moves you toward financial independence instead of just checking a compliance box.

DAN: Most executives and business owners that I meet with are leaving six figures on the table with their retirement plans. Not because they're lazy, but because no one's ever explained to them their options in a way that actually makes sense. Today, I'm going to fix that with a field guide that you can actually use.

DAN: I'm Dan Pasone, founder of Tailored Wealth, and I help executives and business owners to optimize wealth slash taxes and reach financial independence. I'm a former executive and now a business owner. So, I understand the financial challenges facing successful busy professionals. And if you're tired of the alphabet soup benefits guide that you promise to read over but never do, you're in the right place.

DAN: Here's what nobody tells you about retirement plans. The plan your company chose wasn't designed for you specifically. It was chosen for broad adoption, administrative ease, or maximum owner savings. Your job is to figure out which lane you're in and optimize your strategy within that system. Think lanes first, products second because your purpose defines your plan.

DAN: And when you know the game you're playing, suddenly all those acronyms start making sense. Private sector folks, which is likely most of you watching, you're in the 401k lane. These are safe harbor designs and potentially a profit sharing or cash balance option if you're really trying to accelerate savings.

DAN: Public sector and education folks, you're in a different universe. 403b and 457b plans, which on paper look much like 401ks, but have completely different rules and opportunities. I'm going to walk through both. and stick with me even if one doesn't apply to you now because career transitions do happen and it's important to know both playbooks.

DAN: Let's start with the workhorse, the 401k. Pre-tax contributions lower your tax bill today and Roth contributions grow tax-free forever. And most plans allow you to split contributions across both, which is likely what you should be doing because it allows you to build tax diversification for your future self. And here's the move that most people miss, the mega backdoor Roth.

DAN: If your plan allows after tax contributions with inplan Roth conversions, you can push way more into Roth accounts than typical limits. Now, not every plan allows for this, so check your plan summary description. But if it does, it's a massive opportunity. Another gem is the age 55 separation rule. If you leave your plan in or after the year you turn 55, you can access that 401k money without paying the 10% early withdrawal penalty.

DAN: This is huge if you're planning for what I call hybrid retirement, which is flexible, purposeful work you actually enjoy while generating income, but also living off of your savings penalty-free. And here's a more recent win. Roth accounts within employer plans no longer have required minimum distributions while you're still alive. That means more control over your retirement income strategy and potentially more wealth that you can pass on.

DAN: Now, if you're a business owner, here's why the 401k is your friend. Company plans have non-discrimination testing, but 401ks have safe harbor designs that make this way simpler, so you can fully participate without worrying about failing compliance tests. Add profit sharing, and you can contribute more total dollars while targeting contributions by role or tenure within the rules.

DAN: And many employers now allow Roth contributions and matches, which is amazing for tax diversification across your entire team. And here's a move that changes retirement outcomes fast. Automatic enrollment with automatic escalation. If you turn it on, each employee is automatically enrolled and their contributions automatically escalate by 1% a year unless they choose otherwise, which ultimately builds great behavior.

DAN: Now, pair this with regular education sessions for new hires and annually for all employees. And now you've built a benefit that actually attracts and retains talent. Quick pause. If you realize that there's more to optimize here than you've thought, I've put together a series of free guides on retirement strategies, tax savings, and company stock plans.

DAN: Head over to yourtailoredwealth.com. The link is in the description and go ahead and grab anything that's relevant to your situation. Now, let's talk about the starter plans. Simple IAS and SE IAS. Simple IAS are light on administration, easy to launch, and great for early stage teams. But here's the catch.

DAN: They have lower contribution limits than 401ks, limited design flexibility, and as your payroll grows, this chassis starts to hold you back. Use a simple as a bridge when you're small, but then transition to a safe harbor 401k as you grow and scale. SEP IAS are even simpler. Ultra simple paperwork and employer only contributions, which is perfect when it's just you and maybe a small team.

DAN: But every employee must get the same percentage of pay. That flat percentage rule gets expensive as headcount grows. So, if you're scaling, plan your exit strategy now so you're not stuck funding a structure that no longer fits your business. Cash balance plans are the deduction accelerators for owners that want to super fund their savings.

DAN: They're usually paired with a 401k profit sharing setup and work best when you've got predictable cash flow and can commit to multi-year funding. I've seen owners put away two to 300K or more in tax advantaged accounts using these. But don't just slap one on because they sound cool. They require planning, commitment, and the right business structure.

DAN: Done right, they're a gamecher. Done wrong, they're an expensive headache. If you work for a school, hospital, or nonprofit, the 403b is your parallel to the 401k. Same elective deferrals, usually a Roth option, but there's a unique twist. the 15-year service catchup. If you've been with your employer long enough, you might get extra contribution room that most people don't even know exists.

DAN: And the age 55 separation rule that we discussed earlier can apply here, too. But one thing to watch is to know your ORISA status. Fiduciary responsibilities and oversight requirements change whether your plan is ORISA covered or not. And that's not just technical paperwork. It changes how your plan is managed and protected.

DAN: Government 457 plans are incredible. They have a separate deferral limit from your 401k or a 403b, which means that you can save into both buckets. That's double the tax advantage savings. A massive opportunity that most people miss. And distributions aren't subject to the 10% early withdrawal penalty. Plus, there's a three-year catch-up provision that can be a powerful latestage savings lever.

DAN: Non-government 457 plans are a completely different animal. They're typically unfunded, restricted to selective management and property of the employer with restricted rollovers, and you need to understand your employer's credit risk in these plans because if your company goes under, your deferred comp could go with it.

DAN: Read the documents carefully and don't assume that it works like a 401k. it doesn't. Here are a few rule shifts to put on your radar. Auto enrollment is now required for most new 401k and 403b plans starting in 2025. I suggest setting the default high enough to capture the match and let it escalate automatically.

DAN: Part-time eligibility expanded in 2025. So now, if you've done two consecutive years of 500 hours or more, you're typically eligible for these plans. That affects a lot of ORISA covered 403bs. So build it into your payroll and eligibility systems. And here's one I'm really excited about. Roth catchup contributions for high earners begin in 2026.

DAN: If your prior year wages are above the threshold, your catchup generally needs to be in the Roth. Treat that as a tax diversification lever, not a punishment. And remember, designated Roth accounts inside employer plans no longer have required minimum distributions while you're alive. so you have more flexibility later in life.

DAN: Now, let me share a quick client story that will bring company retirement planning to life. A growing firm came to us a couple of years ago. They had been using a simple IRA for many years while their company was smaller. But the business had 10xed and the full-time employee count went from 5 to 25 and the owner felt frustrated because of the lack of savings opportunities within his current plan.

DAN: So, we moved them to a safe harbor 401k with a profit sharing option that raised the ceiling for total annual savings and allowed us to deploy employer dollars with more precision. We also turned on the Roth 401k so that the owner and the team could save into both pre-tax and future tax-free buckets, achieving actual tax diversification. We upgraded the investment lineup to institutional share classes and added managed models for those that wanted a guided path.

DAN: The outcome, higher savings opportunities for the owner and the team, more flexible tax planning and a benefit that allows them to attract and retain talent. More importantly, the plan now actually match the ambition of the business instead of holding it back. Now, let me clean up the most common mistakes I see every week so you don't make them.

DAN: Mistake one, missing the separate 457b limit. If you have a 401k or 403b paired with a government 457b, coordinate both. Don't leave money on the table. Mistake number two, ignoring the 403b service-based catchup for long tenur staff. This is extra contribution space you might be leaving unused. Mistake number three, assuming that the Roth is income limited through your company plan.

DAN: Roth IRA limits don't apply within company plans if your plan allows for it. You can use it regardless of your income. Mistake number four is letting the investment menu sprawl until people freeze with analysis paralysis. Keep a clean core of broad lowcost options along with manage models for those that prefer simplicity.

DAN: Mistake five is running yesterday's plan within a growing company. A simple IRA feels fine until your payroll and headcount make those lower limits feel painful. It's time to upgrade to the 401k before the problem becomes obvious, not after. And if you want a quick framework to get the right design, here's my three-step approach. Step one is purpose.

DAN: Decide if your priority is owner focused savings, broad employee benefit, or both. And this purpose will help to decide your chassis. Step two is people. map your eligibility, auto enrollment, vesting, and testing. A safe harbor 401k removes common headaches, and public employers can pair a 403b with a government 457 to open up additional savings.

DAN: Step three is plan. Offer a WTH. Keep the investment menu clean and do regular education sessions so the team actually understands the benefit that you offer. Purpose, people, plan in that order. Now, here's what to do this week if you're an employee. Log into your plan portal. Turn on the Roth if it's available and set an auto increase tied to your next raise.

DAN: And check your investment allocation. If your lineup feels crowded, then choose a managed model that matches your risk and time horizon. Simple moves, big impact. Now, here's what to do this week. If you're a business owner, if your growth is real and you're still using a simple or a SEP, price out using a safe harbor 401k with a profit sharing option.

DAN: Turn on autoenrollment and escalation and pair it with regular education sessions when new employees come on board and at least once a year. Your plan should work as hard as your people do. Now, let me recap this idea so it sticks. Purpose first, people second, plan third. Choose the chassis that actually fits your goals so your plan works for you, not against you.

DAN: When purpose matches intention, your benefits stop being a confusing alphabet soup and start being a real wealth buildinging engine. That's the difference between just checking a compliance box and actually building financial freedom. If you want ongoing advice that keeps you current on plan design, equity compensation, and tax strategy, subscribe to our free newsletter at making senseofyoumoney.com.

DAN: The link is in the description. Join the community and stay ahead of rule changes. And if this was helpful, smash that like button and subscribe so you don't miss the next one. I'm Dan Pasco with Tailored Wealth. Thanks for watching and I'll see you in the next

• IRS – 401(k), 403(b), and 457(b) Contribution Limits – Official cost-of-living adjustments for workplace retirement plans.
• IRS – Choosing a Retirement Plan in a SECURE 2.0 World – Overview of 401(k), SIMPLE, SEP, and Roth employer contribution rules.
• IRS Revenue Procedure 2024-25 – 2025 HSA Limits – Confirms HSA contribution limits and HDHP thresholds.
• Milliman – SECURE 2.0 and Roth RMD Changes – Explains elimination of pre-death RMDs for Roth accounts in employer plans.
• Kiplinger – SECURE 2.0 Act Summary – Covers auto-enrollment, long-term part-time rules, and enhanced catch-ups.
• Fidelity – SIMPLE IRA Contribution Limits 2025 – Current SIMPLE IRA deferral and catch-up limits and plan design notes.
• Fidelity – SEP IRA Contribution Limits 2025 – High-level SEP contribution limits and employer rules.
• Tailored Wealth – Retirement & Tax Strategy for Leaders – Learn more about plan design, equity strategies, and integrated planning.
• Making Sense of Your Money – Newsletter & Resources – Free tools and updates on retirement rules, equity compensation, and tax planning.

• Making Sense of Your Money – Free Retirement & Tax Strategy Guides
• Tailored Wealth – Podcast & Video Archives
• Tailored Wealth – Retirement Plan & Tax Strategy for Executives and Owners
• Dan Pasone on YouTube – Retirement, Equity, and Tax Strategy Videos

If you suspect your company retirement plan isn’t pulling its weight, small design changes can translate into six-figure differences over your career.

• Clarify your lane and chassis: Visit Tailored Wealth to explore how a customized plan review can align your 401(k), 403(b), 457(b), SIMPLE, SEP, or cash balance plan with your actual goals.
• Stay ahead of rule changes: Join the Making Sense of Your Money newsletter for ongoing updates on SECURE 2.0 provisions, plan design opportunities, and tax strategies for high earners.