A study by National Small Business United and Arthur Andersen revealed that only 28 percent of small and medium-size businesses offer retirement benefits to their full-time employees. Many small businesses just can't afford to sponsor retirement plans.

However, you might be able to sponsor a retirement plan and not even realize it. A 401(k) plan is just one option. Before you dismiss the idea of sponsoring a retirement plan, consider all the available choices — 401(k), SIMPLE IRA, profit-sharing plan, money-purchase plan, SEP IRA, or Keogh plan — to determine whether you want to offer, or can afford to offer, one to your employees.

401(k)
A 401(k) is the most common company-sponsored savings plan. Any business with one or more employees can set one up. Employees can contribute up to $10,000 each year to their 401(k), and employers can choose if and how much they want to add. However, their combined contribution cannot exceed $30,000, or more than 15 percent of the worker's yearly compensation.