When we are working with businesses that have employees and want to setup a more robust retirement option with more flexibility we look at a couple options:
- Traditional 401k – Discussed in this article
- Safe Harbor 401k or QACA Safe Harbor 401k – Discussed in next article
What Is a Traditional 401k and What Do I Need To Know About Traditional 401ks?
A traditional 401k is an employer-sponsored plan that gives employees a choice of investment options.
- Contributions and Matching
- Contributions up to $19,500 for 2021.
- The ability to create a matching program to your company’s goals.
- The ability to create a vesting schedule to your company’s goals.
- Customized planning available.
- Tax Advantages
- Employer contributions are deductible business expenses.
- Elective contributions and investments gains may enjoy tax deferral until distribution.
- Offers both pre-tax and Roth options
- Filing and Compliance
- Requires annual 5500 filing.
- Compliance requirements must be met.
- Must offer to all qualifying employees.
If you are looking for professional advice and help in this area, we work directly with Life, Inc Retirement Services. Email us for an introduction or visit this page.
On the link above you can setup a call to connect with an expert and get started right away. There is also a retirement plan evaluator which will guide you towards the best plan for your business.
If you don’t have an accounting or tax advisor (or you need assistance with anything discussed), click here to book your complimentary strategy session with JETRO.