While every small business owner would like to believe that they will sell their business at retirement, this is in reality not the case for most. In fact, a very small majority of small business owner are able to sell their businesses at retirement. This means that a small business owner will need to take their retirement future into their own hands by establishing and saving into retirement plans.

But, with several options to consider, many small business owners find the proposition of self employed retirement plans overwhelming. And, in the end, don't take the necessary implementation steps to protect their financial future.

Consider the following small business retirement plans and choose the one that most closely matches your personal financial goals.

A SEP IRA can be established by self employed individuals for the purpose of saving for retirement. For sole proprietors, this is an attractive retirement plan option as the allowable contribution is much higher on an annual basis than the individual 401(k). If the small business owner has employees, the SEP IRA plan can also be established for them, with the business owner being able to take a corporate tax deduction for any contribution made on the employee's behalf.

Individual 401(k)

An individual 401(K), or a solo 401(k), was designed for both small business owners or their spouses as a method for saving for their own retirement. The annual plan contributions allowed per person, per year are the same as company sponsored plans, and vary on an annual basis. One of the benefits of a solo 401(k) is that there is a catch up provision for people over the age of 50, meaning that self employed business owners can put in more during their 50's to boost their retirement savings that they may not have been building from prior years.

Roth IRA

The Roth IRA account does not permit the small business owner from taking a tax deduction in the current tax year, but it does offer tax deferral and the opportunity for tax free withdrawals at the age of retirement. There are income limitations for an individual or couple to be able to contribute, so it is advisable to check prior to investing in this investment account. A Roth IRA also offers individuals over the age of 50 who are eligible to make catch up provisions, enabling them to build their personal retirement savings.

Traditional IRA

A traditional IRA is not used very frequently for small business owners to save for retirement as the contribution limits are lower than the individual 401(k) plan and the SEP IRA plan. But, allowable contributions up to certain income limitations when made on a pre-tax basis can help to lower the small business owner's annual taxable income.

KEOGH Plan

The Keogh plan is a pension plan that was designed for self employed individuals. It can be established as either a defined benefit or a defined contribution plan. Keogh plans are slightly more expensive to administer than other retirement plans, so they are not used as frequently.

Before investing into any retirement plan, it is advised to seek the advice of a financial professional.