Setting Up A 401k Plan For My Small Business - Submission specialist

late ThursdaySoon after Sabina Gault got her public relations firm up and running inshe asked for a show of hands from employees interested in having a company k plan.

Gault, whose firm, Konnect Public Relationsbased in Los Angeles, had just a few employees at the time. Two years later, with eight people on her payroll, she raised the question a second time. Again, the response was lukewarm. Finally, inshe made an executive decision about the k: While the share of small businesses offering k plans has picked up since — when just 10 percent offered the benefit — k plans are still the exception at small companies.

Employers point to a lack of interest among employees coupled with the costs of setting up and administering the plans. That is one reason Ms. Gault waited as long as she did. Had they been a little older, she said, it might have been more of a priority.

Which Retirement Account Should a Small Business Owner use? SEP IRA vs. Solo 401k

Retirement plans typically take a back seat to salary, benefits like health insurance and other more immediate perks, said Sabrina Parsons, chief executive of Palo Alto Softwarea employee business planning software company based in Eugene, Ore. Owners can contribute to individual retirement accounts or to a Roth I. That click one third the maximum allowed for a k plan.

Fortunately, setting up a k plan is considerably easier and cheaper than it was just a decade ago. Setup and administrative costs vary from one provider to the next — and increase if the plan offers more customized investment options, hands-on advice and other bells and whistles.

And there are tax incentives. Owners shopping for a plan will want to balance investment options and services with costs paid by the company and fees paid by the employee.

Many providers charge a management fee — to employers or employees — on top of fixed administrative fees. Employers should be wary if fees creep above 1 percent of employee assets. Additional management fees are charged by the mutual funds or other exchange-traded funds used in k plans. View all New York Times newsletters.

We can provide all the help you need to set up your plan. Call a small-business specialist at Invest now Log on to Vanguard Small Business Online. plan to a Merrill Edge Small Business help setting up your plan? specifically for small businesses and their employees. small business k. Sep 28, · What are the first steps to learning about and setting up a retirement plan? Choosing a Retirement Solution for Your Small Business. This article will cover the pros and cons of a Rollover For Business start up with my k. The plan is to open setting the business up.

One exception, according to Ms. It may be worth paying more to bring in a financial adviser to help select investment options and to give employees hands-on investment advice.

Having worked in the financial services industry for much of Setting Up A 401k Plan For My Small Business career, Darius Mirshahzadeh, president of Endeavor America Loan Serviceswas particularly aware of fees when it came time to set up a k for his one-year-old business.

The plan, which will be available to employees beginning in August, is administered by the Online ka year-old company with more than 7, small businesses on its platform. For some employers, though, administrative fees are just the beginning of the expense.

The bigger concern for many small businesses is the cost of matching benefits. A provision in the Employee Retirement Income Security Act prohibits companies from allowing the highest-paid employees to contribute this web page more than the rest of the work force.

Specifically, the average contribution of the highly paid group cannot be more than 2 percentage points higher than the average for rank-and-file employees. If the average employee contributes 5 percent of salary to the plan, for example, the average for the highest-paid employees cannot exceed 7 percent.

Nevertheless, to avoid the administrative inconvenience of complying with this rule, many companies choose so-called safe harbor plans.

Oct 02, · Better known as ShareBuilder K where we a small business owner to purchase a plan and get it started. Here are six steps to setting up a plan. How to set up a (k) for your small business found that more than 70% of small firms didn’t offer a (k) plan to their employees. Fidelity can help you design (k) plans for your small business with more than 20 employees. Offer competitive retirement benefits to your employees. Jul 30, · Setting up a plan is considerably easier and cheaper than it was just Small Business | Many Reasons to Offer (k)s including Sharebuilder k. When you want to set up a retirement plan for your employees, is for small business owners and those who are It was named well — setting one up is fairly.

These plans do require an employer contribution — most common is a dollar-for-dollar match, up to 4 percent — visit web page they give all employees carte blanche to contribute as much as they want to the plan, up to the standard limits. The standard advice is that most companies that can afford to match probably should. A generous retirement package can be an asset for recruiting and retaining employees, said Mr.

LaBrecque, who uses a safe harbor plan for his employees. Small businesses that are not quite ready to make that commitment, however, can start with the traditional plan.

Gault is sticking with a traditional plan — though she does offer employees a 10 percent match on contributions of up to 5 percent of their salary. The perk has proved to be more popular than she expected. Today, she said, roughly half of her 30 employees use the plan to save Setting Up A 401k Plan For My Small Business their retirement years. Tell us what you think. Please upgrade your browser.

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