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DEFINITION of 'SBO-401(k)'

A tax-deferred, government-registered retirement savings plan that is specially designed for small business owners (SBOs). Eligible participants for an SBO-401(k) are businesses that employ the business's owners and their spouses. The business must not have any other eligible employees.

BREAKING DOWN 'SBO-401(k)'

An SBO-401(k) provides self-employed small business owners the opportunity to participate in a tax-deferred retirement savings plan. These types of savings plans may be either self-directed or professionally managed.

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RELATED FAQS
  1. How is an SBO-401(k) set up?

    Learn what a Small Business Owner 401(k) plan is and who is eligible to establish one. Find out what the IRS requires of ... Read Answer >>
  2. I own a small business. Can the SBO-401(k) work for me?

    The SBO-401(k) can only be adopted by businesses in which only the business's owners are eligible participants in the plan. ... Read Answer >>
  3. My company has three partners but plans to hire more this year. Would we be better ...

    It depends.The SBO-401(k) plan is suitable if the plan covers only the business owners - in this case, the partners in the ... Read Answer >>
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    Learn if an individual may contribute to a Simplified Employee Pension IRA when his or her employer offers a plan and how ... Read Answer >>
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    Meeting eligibility requirements for a qualified retirement plan vary but generally dictate a minimum age and a the amount ... Read Answer >>
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    It is very unlikely that you will find a qualified plan or an IRA-based plan that will allow the employer to exclude other ... Read Answer >>
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