401(k)

An important service we offer business owners is a retirement savings plan, known as a 401(k) plan or a qualified employer-sponsored retirement plan. This plan allows you and your employees to save and invest a piece of your paycheck before taxes are taken out.

With a 401(k) plan, participants control how their money is invested. For example, employees can invest in a spread of mutual funds comprised of stocks, bonds, and money market investments. The most popular option when it comes to creating a 401(k) plan tends to be target-date funds, which are a combination of stocks and bonds that slowly become more conservative as you reach retirement. Another option we could implement is setting up Roth IRA accounts, which are individual retirement accounts that allow a person to set aside after-tax income of a specified amount of money each year.

401(k) plans can be tricky at times because there are many restrictions and caveats, however, we are here to help make this an easy retirement plan that is set up to fit your needs. We sit down with each of our clients to learn more about them and discuss their needs for the future as they plan out their retirement. From there, we begin making a specific plan that is right for you.

We may decide to set up a traditional or a Roth 401(k) plan depending on your unique situation. An advantage of the traditional 401(k) plan is the tax-advantaged nature of contributions and earnings. This plan allows employees to make pre-tax contributions to the plan, but it taxes withdrawals from the account. On the other hand, a Roth 401(k) plan offers a different tax-advantaged option. Contributions are made with after-tax dollars, but withdrawals are fully tax-free as long as certain conditions are met. 

More and more people today are deciding to participate in 401(k) plans due to the changes that have been made to benefit employees. With the average 401(k) plan, there are close to two dozen different investment options all while fund expenses and management fees have continuously decreased. In addition, features such as increased fee visibility, automatic enrollment, and more low-cost index fund options and catch-up contributions for those near retirement have been added to most of the plans. People are even able to make larger contributions to plans over time due to contribution limits being indexed to inflation. 

Maximizing your savings and planning out your retirement is crucial for setting yourself up for the last part of your life. You want to be able to enjoy the time you have left and not feel overwhelmed by complicated processes of retirement planning. We are here to make your life easier by setting you up with a personalized 401(k) plan to match your needs.