Which retirement plans allow small businesses to use Vanguard funds?
If you’ve invested on your own, there’s a good chance you’re familiar with Vanguard funds.
Known for its low-cost funds and straightforward approach, it’s a common choice for many investors.
When it comes to your business, there are several small business retirement plan options that allow you to invest in Vanguard funds within a structure that’s easier to manage.
KEY POINTS:
- A straightforward investment approach: Vanguard funds are designed to be easy to understand, with clear objectives and long-term focus.
- Lower investment costs: Lower investment costs can make a difference over time, especially when contributions are made year after year.
- Consistency across accounts: You can use a similar investment approach across personal and retirement accounts.
Why small business owners choose Vanguard funds for retirement
For many business owners, investing in Vanguard funds starts with familiarity.
You may already know what you’re investing in
If you’ve used Vanguard funds in a personal account, you may not want to start over with something completely different.
You prefer a straightforward approach
Vanguard funds are designed with clear objectives and long-term focus. That makes it easier to understand how your investments are working—without needing to manage overly complex strategies.
Costs matter over time
Even small differences in investment costs can add up over time, especially when you’re contributing year after year. Keeping costs in mind can help more of your money stay invested.
You want consistency across accounts
Using a similar investment approach across personal and retirement accounts can make everything easier to track and manage.
How to use Vanguard funds in a small business retirement plan
A common misconception is that using Vanguard funds requires setting up a large, complex retirement plan or opening an account directly to specifically access those funds.
In reality, small business retirement plans are typically set up through a provider, which handles the structure of the plan and offers a selection of investment options.
The key is choosing the type of plan that fits your business.
Comparing small business retirement plans that offer Vanguard funds
For businesses looking to keep their investment approach consistent, Ascensus offers plans with lineups built with exclusively Vanguard investments:
These are tax-advantaged retirement plans designed to help small businesses save for the future.
Each plan has different eligibility requirements, contribution rules, and administrative responsibilities—but all provide a way to invest within a structured retirement plan.
Comparing plan types
| Individual (k) | SIMPLE IRA | SEP IRA | |
| May be ideal for | Self employed owners or businesses with no common law employees | Small businesses with up to 100 employees that want employees to save through payroll | Businesses that want a simple, employer funded benefit |
| Who contributes | Employer and employee | Employer and employee | Employer only |
| How much can be contributed (2026) | Employee: up to $24,500 Employer: up to 25% of compensation Total combined limit: $72,000* |
Employee: up to $17,000 Employer: required match or fixed contribution* |
Up to 25% of compensation, up to $72,000* |
| IRS filing required | Yes | No | No |
*Catch up contributions: Employees age 50 or older may be eligible to make additional “catch up” contributions, depending on the plan type and elections.
These plan types are commonly offered through providers like Ascensus and can include an investment lineup built around Vanguard funds.
Individual (Solo) 401(k) with Vanguard funds
An Individual 401(k) is designed for self‑employed business owners or businesses with no common‑law employees, other than a spouse.
How it works
You contribute as both the employee and the employer, which can allow for higher total contributions compared to other small business plans.
Investment approach
You can build your portfolio using Vanguard funds within the plan, keeping a familiar investment strategy.
Why it’s often considered
- Higher contribution flexibility
- Control over how contributions are invested
- Designed for self-employed individuals
This option often appeals to business owners who want more control while keeping their investment strategy consistent.
Learn more about an Individual (Solo) 401(k) >
SIMPLE IRA with Vanguard funds
A Savings Incentive Match Plan for Employees (SIMPLE) IRA is often used by small businesses with employees who want a plan that is easy to set up and maintain.
How it works
Employees contribute through payroll deduction, and employers are required to make contributions as well.
Investment approach
Participants can select from a lineup of investment options of exclusively Vanguard funds.
Why it’s often considered
- Straightforward administration
- No annual nondiscrimination testing
- Predictable employer contribution requirements
- Pre-tax and Roth contribution options available
This plan is often chosen by businesses that want to offer a retirement benefit to employees, allow employees to contribute, and keep administration relatively simple.
Learn more about a SIMPLE IRA >
SEP IRA with Vanguard funds
A SEP IRA is funded entirely by employer contributions and is commonly used by self-employed individuals or small businesses with few employees.
How it works
The employer decides how much to contribute each year, which can vary based on business performance.
Investment approach
Employer contributions are invested exclusively in Vanguard funds available through the plan.
Why it’s often considered
- Employer contributions are decided by the business each year
- Minimal ongoing administration
- No requirement to contribute every year
This option can be a good fit for those who want flexibility without ongoing contribution commitments.
A simpler, more “brokerage-like” retirement plan experience
Retirement plans have a reputation for being time-consuming or difficult to maintain. Today, many small business plans are designed to be more user-friendly, including:
- A more intuitive, easy-to-use online experience
- Streamlined setup and onboarding
- Clear visibility into investments and balances
- Ongoing support when needed
When paired with an investment lineup that includes exclusively Vanguard funds, the overall experience can feel closer to managing a personal account, while still providing the structure and tax advantages of a retirement plan.
FAQs: Using Vanguard funds in retirement plans
Can Vanguard funds be accessed through different retirement plan providers?
Yes.
Do I need to open an account directly with Vanguard?
No. In most cases, Vanguard funds are accessed through a retirement plan provider, rather than by opening a separate account directly.
Are these plans only for large businesses?
No. Individual 401(k)s, SIMPLE IRAs, and SEP IRAs are specifically designed for small businesses and self-employed individuals.
Can I change plans as my business grows?
Yes. Many businesses start with a SIMPLE or SEP IRA and transition to a 401(k) as their needs change.
Are these plans difficult to manage?
They are generally designed to be simpler than traditional 401(k) plans, with less ongoing administration, especially when supported by a provider.
Choosing the right retirement plan for your business
The right plan depends on a few key factors:
- Whether you have employees
- How much you want to contribute
- How consistent your income is
- How much administrative responsibility you want to take on
You don’t need to change how you invest to offer a retirement plan.
With the right structure, you can continue using an approach that already works—while creating a benefit that supports both your business and your employees.
Ready to get started?
For more information about small business retirement plans featuring Vanguard investments or how to get started, contact us at 833-889-2333.
