Take your pick of retirement plans

(Money Magazine) -- As no-brainers go, this one is right up there: Rather than sink all your cash back into your business, you should funnel some into your own retirement. But a tough economy like this one often tempts small business owners to skimp, figuring they'll make up the savings later.

Problem is, "later" often never comes: Just 22% of small and mid-size employers have set up retirement savings plans, according to the National Small Business Association.

"Many are deterred by the potential costs and find it difficult to navigate the options," says Tom Biddison, a principal at Cornerstone Financial in Baltimore. But setting up a plan doesn't have to send you running for an economy-size aspirin bottle.

Here's a cheat sheet of your best options, from lowest cost to highest, all of which you can set up via a no-load investment firm such as Fidelity or Vanguard.

Even more reason to do it now: Thanks to the 2006 Pension Protection Act, you get a federal tax credit for your business of 50% of the plan setup and administration costs (up to $500 annually) for the first three years. (See our Ultimate guide to retirement for additional information on all of these plans.)

Best for: Sole proprietors looking to save only in profitable years

How it works: You can sock away 25% of your compensation up to $46,000 yearly, but you don't have to put money in every single year. (If you have eligible employees, you must stash the same amount for them, which can get very expensive.) It's the cheapest and easiest plan to administer - just mail a 5305-SEP form to the IRS each year (get it at irs.gov) and pay about $15 per head to the plan's provider.

Best for: Small employers looking to keep staffers happy

How it works: Each person in the plan can save no more than $10,500 a year. In addition, employers must either match workers' contributions at up to 3% of salary or pay a flat 2%. Fees are low - about $25 a person per year. You must file a 5304-SIMPLE form (5305- SIMPLE if using a provider) with the IRS yearly.

Best for: People who work for themselves and want to save more

How it works: A self-employed person with no employees can contribute 20% to 25% of compensation plus an additional $15,500 (up to $46,000). No one else except a spouse can participate. The plan lets you consolidate retirement assets from past plans. Setup costs about $100; annual fees, about $250.

Best for: Businesses of more than 10 employees

How it works: This plan typically permits the biggest contributions by employees - they can stash up to $15,500 a year. Owners max out at $46,000 but can contribute only 2% more than the average employee does. Matching is up to you. A 401(k) is expensive: Initial costs are around $500, and yearly fees range from $1,000 to $2,000.

Best for: Sole proprietors over 45 with stable high income

How it works: With this classic pension, there's no contribution limit, so you can save the most of any retirement plan. The only cap is the payout: $185,000 a year. But you must participate for at least five consecutive years, and the plans are pricey. After about $750 in setup charges, sole proprietors pay $750 a year in fees; those with workers might pay annual fees of $1,500, plus $100 for each employee. But here's the real crusher: You must pay into the plan on behalf of employees. So a pension can be prohibitively expensive unless you're a one-man band.