Nobody likes to think about how much time they have left to live, but studies…
From abandoning vices to dedicating time for some inward reflection, there is no denying that the start of every new year is a time for reflection, looking to the future, and abandoning what didn’t work in the past.
When was the last time you examined your 401(k) business plan? Do you have a 401(k) plan for your business? Are you sure that your current plan is doing everything for you and your employees that it can? If you answer any of these questions with uncertainty or hesitation, it may be time to spend some of that reflection time on your retirement planning strategy.
If your business does not offer a 401(k) plan as a part of its benefits package, you could be missing out on valuable talent that may seek work elsewhere— perhaps with other firms that do.
401(k) Plan Types and Benefits Offerings
A 401(k) is a product that is often purchased by a business when their income begins to increase. Attractive to new and potential hires, a Safe Harbor 401(k) Plan is a type of plan where you, as a business owner and your employees, can defer up to $18,500 of pre-tax dollars into the plan.
When your business begins to become even more successful, then the day may come when the formula will need to be analyzed to see if it is truly maximizing what it can do for you and your employees. This is the point where a Safe Harbor New Comparability Formula may prove helpful financially for the business owners.
And then last but not least, if there’s a big need for tax deductions, and because your once-humble business has now become extremely successful ($270-thousand-dollar+ revenue per year), then you may be looking for something a bit more supercharged than what a standard 401(k) profit-sharing plan can offer. In cases such as these, a Defined Benefit Plan could allow employers/business owners to receive well above the $50 to $55 thousand dollar a year limit that can then be put into a traditional profit-sharing plan. A Defined Benefit Plan allows significantly higher contributions than a Profit Sharing Plan.
401(k) Plans are available to firms both big and small with no minimums. It is crucial however to pick a provider that does on-site enrollments rather than just having the employees visit a website to learn about the plan because ultimately a website is never going to excite an individual into putting their own money in and if they don’t contribute, then the plan won’t work as efficiently as it could if the employees decide to contribute.
The Best 401(k) Plan For Your Business
Interested in incorporating a 401(k) plan into your employee benefits offerings? The start of a new year is the perfect time. Learn more about the unique 401(k) plans available to members of The Florida Bar.