Which Small Business 401(k) Plan Is Right for Me?
No matter the type or duration of your employment, one goal that motivates you to perform your best at work every day is the dream of a comfortable retirement. Most working individuals set aside a certain amount from their paychecks to add to their retirement nest egg, which can be used for a peaceful post-retirement life. With the help of retirement savings, you can achieve your long-term goals, like traveling the world with family or funding your children's higher education. While some people save on their own, most employees invest in a retirement plan that minimizes the hassle of manually saving your funds and provides tax benefits and other advantages designed to maximize your retirement savings.
If you own a small business, you can enroll in a 401(k) plan to help yourself and your employees save money for a financially secure future. The pricing for 401(k) plans differs based on your financial needs and the number of employees working at your company. Most retirement plans offer a flat, affordable fee and a stress-free way to start your savings fund within minutes. The type of small business plan you choose for your company is customized according to your needs and purpose-built to minimize administrative bloat. Read on as we take a closer look at the types of 401(k) plans you can choose for your small business.
The Single(k) plan is a solo 401(k) plan meant for individuals who are the sole proprietors of their small businesses. It is also ideal for self-employed workers, including freelancers, independent contractors, entrepreneurs, and more. By enrolling in this type of 401(k) plan, workers can contribute both as employers and employees, which enhances their savings limits by nearly twice. Individuals with this plan can contribute up to $60,000 annually to their 401(k) account.
The Saver(k) plan might be the ideal retirement plan for small businesses with multiple employees. These plans are excellent options for companies that want to provide their employees with competitive savings options for their retirement funds and create a high-morale and highly competitive workforce. The plan has multiple provisions for employee convenience, including automatic recruitment, financial wellness assistance, online customer support, and a tax credit of up to $16,500.
Each business has different financial needs that are unique to its workforce. When it comes to selecting a pre-made 401(k) plan, the 'one-size-fits-all' approach might not suit every company. In such cases, companies can craft their own customized 401(k) plans according to the needs of their employees and employers. Custom 401(k) plans allow employers to have a greater degree of control over their finances, including fund transfers, loans, tax payments, and more.
In an increasingly competitive employment landscape, providing employees with desired benefits has become crucial to ensure high morale and talent retention. A 401(k) plan is the perfect tool to achieve these goals while securing the futures of all employers and employees working at your small business. Depending on your business needs, you can choose between multiple plans, including solo, saver, custom, and reserve 401(k) among others.