Your small business is reaping the benefits of your hard work. Your employees are dear to you and you want to provide them with as many benefits as you can afford. You now want to give them and yourself a 401(k) plan. It's an invaluable benefit that lets everyone decide how best to invest their money.
What is a safe harbor plan? A 401(k) plan lets members save and invest part of their salary before taxes kick in. Making savings with tax-deferred bucks means the money does not attract any state (if applicable) or federal income tax till it's withdrawn, usually at retirement when the beneficiary will probably be in a smaller tax bracket than now.
401(k) plans are no longer meant for large companies only; they can now suit the budgets and reach of small companies. You probably have learnt about the common fallacies that often hinder small companies from implementing 401(k) plans and found that:
A 401(k) plan can benefit any size of company
For employees to get many benefits, the employer does not need to match employee contributions
Small companies can afford plan management fees as long as they use administrators that focus on that market
Selecting a long-term 401(k) service provider
Begin by researching the numerous financial institutions that provide third party administration and record-keeping services for small business 401 k plans, such as insurance companies, mutual fund companies and brokerage firms. Find an established company with an excellent reputation in the field of 401(k).
Contact businesspersons like you to find out their experiences with companies that provide 401(k) plans, and ask what providers they would recommend. If your business has an accountancy service or financial adviser, get their say before you decide.
Choosing the 401(k) plan
Once you've picked a 401(k) provider, it's time to choose the best plan for you as well as your employees. Regardless of the size of company, there are three options for employees: automatic enrollment 401(k), safe harbor 401(k), or traditional 401(k) plan.
Once you've picked your 401(k) plan provider as well as the right plan for your business, you can consult with the provider and have it established.
To sum up, setting up a 401(k) retirement plan for your company makes your small business appealing to job seekers, allows you to keep current staff, provides tax saving opportunities and lets you, the employer, garner invaluable retirement benefits too.
To get more information about 401(k) plans, visit the websites of IRS and Department of Labor. There are related topics on this at this post: http://financialadvisorvirginia.wikia.com/wiki/Financial_Advisor_Virginia_Wiki.