Financial Services
401(k) Plans
A retirement plan can be one of the most valued benefits a business offers. We can help you explore 401(k) plan options that may fit your business — whether you employ two people or two hundred.
- NYS Licensed Agency
- Serving NY Since 1969
Why Offer a 401(k)?
A workplace retirement plan can help a business in several ways, beyond simply helping employees save.
Attract and Retain Employees
Retirement benefits are a core part of a competitive compensation package and can help with recruiting and keeping good people.
Potential Tax Advantages
Employer contributions are generally tax-deductible, and certain start-up tax credits may be available to eligible small businesses. Consult your tax professional about your situation.
Owners Save Too
Business owners participate alongside employees, and plan designs like safe harbor or owner-only 401(k)s can help owners build their own retirement savings.
Common 401(k) Plan Types
Plan structures vary in employer contribution requirements, testing rules, and administrative complexity. These are some of the designs we can discuss with you.
Traditional 401(k)
A flexible plan structure where employees defer part of their pay, and employers may choose to match or make profit-sharing contributions. Plan design options include vesting schedules and eligibility rules.
Safe Harbor 401(k)
A plan design that includes required employer contributions in exchange for relief from certain annual nondiscrimination testing. Often considered by businesses where owners or key employees want to maximize their own deferrals.
SIMPLE 401(k)
A streamlined option generally available to smaller employers, with required employer contributions and reduced administrative requirements compared to a traditional 401(k).
Owner-Only / Solo 401(k)
Designed for self-employed individuals and owner-only businesses (including a spouse on payroll), allowing contributions as both employer and employee.
Roth 401(k) Feature
Many plans can add a Roth feature, letting employees make after-tax contributions with potentially tax-free qualified withdrawals later. Employees may be able to split deferrals between pre-tax and Roth.
Profit Sharing
An employer contribution feature that can be layered onto a 401(k), giving the business flexibility to contribute more in strong years and less in lean ones.
Things to Consider When Choosing a Plan
There is no one-size-fits-all retirement plan. These factors typically shape which design may fit your business.
Plan Design
Eligibility, matching formulas, vesting schedules, and automatic enrollment are all design choices that shape how a plan works for your business and your employees.
Administration
Plans involve recordkeeping, annual filings, and participant notices. Understanding the administrative workload — and who handles it — is an important part of choosing a plan.
Employee Participation
Features like employer matching and automatic enrollment can influence how many employees participate and how much they save.
Contribution Limits
The IRS sets annual limits on employee deferrals and total contributions, and these limits are adjusted periodically. A licensed professional can walk you through the current figures.
Frequently Asked Questions
What is a 401(k) plan?
A 401(k) is an employer-sponsored retirement savings plan that lets employees contribute a portion of their wages, typically on a pre-tax basis. Many employers also contribute through matching or profit-sharing. Investments grow tax-deferred until withdrawal, subject to IRS rules.
Can a small business offer a 401(k)?
Yes. Plan structures exist for businesses of many sizes, from owner-only solo 401(k) plans to SIMPLE and safe harbor designs for small employers. The right structure depends on your goals, workforce, and administrative preferences — a consultation can help you compare the options.
What is the difference between traditional and Roth 401(k) contributions?
Traditional contributions are generally made pre-tax, reducing taxable income now, with taxes due on qualified withdrawals later. Roth contributions are made after-tax, and qualified withdrawals — including earnings — may be tax-free. Many plans allow employees to use both. Consult a tax professional about your specific situation.
What is a safe harbor 401(k)?
A safe harbor 401(k) is a plan design where the employer commits to certain contributions for employees. In exchange, the plan is generally exempt from some annual nondiscrimination tests, which can make it easier for owners and highly compensated employees to contribute the maximum allowed.
How do I get started with a 401(k) plan for my business?
Schedule a consultation or call our office at 585-657-6101. We can discuss your goals, review the plan structures that may fit your business, and connect you with the resources to set up and maintain a plan.
Related Coverage Options
Securities and Investment Advisory services offered through Ameritas Investment Corp. (AIC) member FINRA/SIPC. AIC is not affiliated with Stan Steele Agency. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your registered representative. Read it carefully before you invest or send money. Securities products are limited to residents of NY. Registered Reps of AIC do not provide legal or tax advice. Consult your attorney or tax professional regarding your situation.
Important Information
This information is provided for general educational purposes only and does not constitute financial, tax, legal, or investment advice. Plan features described are examples and may not be available in all circumstances. Contribution limits, tax treatment, and plan rules are set by federal law and IRS guidance and are subject to change. Please consult with appropriate licensed professionals to discuss your specific needs and options. Stan Steele Agency is licensed for insurance in New York State.
Ready to talk about a 401(k) plan for your business?
Schedule an appointment or give us a call. A licensed professional can help you understand your options.