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If you are an entrepreneur or small business owner, or an independent consultant setting up a new business, you are the one who’s in control regarding your financial future.  There is no one else to rely on when it comes to saving and planning for the future, so you must take on this matter yourself.  Many of these plans allow for rollovers from former employee retirement accounts.  Here are a few savings options for entrepreneurs and small business owners.

Solo 401(k)

A solo 401(k) plan is a great alternative to the traditional 401(k), and was created for self-employed individuals, entrepreneurs, and small business owners with no full time employees. It’s perfect for independent contractors, agents and sales people.
The advantage of a solo 401(k) is that it is simple to use and maintain.  You may contribute up to $16,500 of tax-deferred income, in addition to up to 25% of profit from your business.  As long as you contribute no more than $49,000 annually, you fall within the limits of the solo 401(k).  The amount you contribute to a solo 401(k) is completely discretionary and can be decreased or suspended at any time.  Additionally, loans against your plan, as well as hardship withdrawals may be allowed.  Rollovers from previous 401(k) plans are allowed as well.  
The cost to set up a plan can be minimized by adopting an IRS approved prototype plan. Many mutual fund and regulated investment companies offer such plans to those who choose to fund contributions through their company.

SEP IRA

A SEP IRA, or Simplified Employee Pension Individual Retirement Account, is a savings and retirement tool that can be used by both small business owners and self-employed people as well.  SEPs are considered part of a profit sharing program, and the employer may contribute up to 25% of a qualifying employee’s income to the fund.
SEPs are affordable and simple to administer, and are an excellent benefit to provide to employees.  For self employed, they are still able to put aside a little over 18% of their net profit.  Contributions to the plan are tax deductible. Additionally, its high contribution limits make it very attractive ($49,000 in 2010).

SIMPLE IRA

Savings Incentive Match Plans for Employees (SIMPLE) IRAs are fairly simple to administer, no-hassle IRA plans that offer a great benefit for employees in your small business.
SIMPLE IRAs allow employees to contribute up to the lesser of $11,500 of their annual compensation or 100% of compensation. Employers may elect to match up to 3% of the employee’s salary or 100% of the employee contribution, whichever is less.  Employees are then vested and are eligible to receive this money upon reaching retirement age. Employee contributions reduce employee wages subject to Federal Income taxes. Employer matching contributions are tax deductible.
Ideal for a small business that employs spouse and children.  And can help employees fund for their retirement at a relatively low cost to the employer.
SIMPLE IRAs are also very strictly administered and cannot be rolled over, nor can a traditional IRA or 401(k) be rolled into a SIMPLE IRA.

SOLO DB Plan

If you are looking to save a whole lot of money over a short period of time and have the resources to do so, this is the plan for you.
These plans are very popular with people in business for themselves who are over 50 years of age, and may have a short period of time in order to meet future income requirements for retirement. There is no limit on contributions. Contributions are based on an amount to fund promised benefits. Contributions are the lesser of $195,000 or 100% of average compensation for the highest three consecutive years.
This type plan can be perfect for a doctor, lawyer or a professional group with senior partners and a relatively young support staff, or an independent contractor with no employees.

Conclusion

In summary, all qualified retirement plans are tax deductible and reduce current year income taxes. Contributions to the plan plus earnings grow tax deferred until retirement. Before setting up a plan, you  should seek help from a qualified benefit consultant, attorney and accountant familiar with such matters in conjunction with a financial planner. The rules can be complex and failure to follow them can lead to problems and even disqualification if not set up properly and monitored at least annually.