Establishing a 401k Program for Your Small Business

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Negosentro| Establishing a 401k Program for Your Small Business |When you run a small business, you don’t always have the ability to assist your employees in the way that larger companies do. Still, these men and women are the reason for your success and you should explore all of your options when it comes to providing for them in the best ways. One easy option to consider is establishing a 401(k) program. By offering this, you give your employees the opportunity to start saving for the future in a real way. Though it might seem like a complicated endeavor, it is much easier than you might imagine.

By following a few steps, you can make decisions that will help you get more out of your attempt to establish a program that works for your team. Take a moment to review these simple ideas and find the right path for your success.

Plan Designs Matter

Perhaps the most challenging step you will take is the first one. Deciding a plan for your company’s 401(k) requires work. You will need to take a look at all of the options available to you and conduct some research to figure out which seems to be the most advantageous. Also, it is worth noting that the IRS tests to ensure that all 401(k) programs are accessible and fair for all employees. If the IRS tests your business and it does not pass, you might have to spend a small fortune to correct your mistakes.

Plan types vary and each will offer a different set of benefits to you and your employees. The most common option is the standard profit-sharing plan. With this option, you as the employer will be able to decide whether or not your business is going to contribute or match the 401(k) accounts of your employees. Another common plan is the Safe Harbor design. While similar to the normal profit-share model, the main difference is that  contributions to this account need to happen immediately. There are several more options of which to be aware, so take time to deliberate each.

Look at Modern Solutions

The beauty of the age of information is that you can easily take care of a number of complicated tasks with the help of the right app, software, or device. When it comes to arranging a 401(k) for your small business, there are several excellent options available to you. Not only can some of these programs help you handle the frustrating details involved with each plan and its maintenance, you might also be able to get a deal on the associated expenses. Guideline 401k, for example, offers the chance to create a 401(k) with fewer fees. 

A program that is designed to help manage your 401(k) can also often take the place of a financial advisor or record keeper. If you don’t use an app to help manage planning and maintenance aspects of your accounts, then you will need to think about selecting an appropriate record keeper and a suitable financial advisor. Both of these roles are critical to the success of a 401(k) plan, so take time to determine the right fit for your business before making any final decisions on the matter.

Consider Enticements

A 401(k) might be exciting to offer your employees in and of itself, but there are also ways to sweeten the deal even more. Most 401(k) structures offer interesting features that you might want to put into place for your staff. For example, you can offer both Roth and traditional payment options to your employees instead of just one or the other. This means that the employees get to decide how taxes are handled with their contributions, instead of opting into whatever you select for the structure. 

By giving more control to your employees, you can encourage a sense of trust and make the plan more appealing all around. Take time to review all of the different options available to you and discover a 401(k) structure and options that help your employees plan for their futures.

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