How Do You Start A Small Business 401(K) Program?
Many small business owners don’t think it is possible to run or afford a 401(k) plan. The Tax Relief Act of 2001 made it possible for companies with only one employee to have 401(k) plans. This gives small businesses and their employees the ability to save larger amounts of money toward retirement and goes a long way in providing benefits for employee retention. When starting a 401(k) program make sure you are following all the federal guidelines. Review the guidelines and requirements set forth by the United States Department of Labor at DOL.gov. Determine how employees will qualify for your plan, how much they can contribute and what the company is willing to match. You want to make sure you are meeting the minimum requirements determined in Step 1. Evaluate the types of plans and decide on which one you want to establish. There are three plans you can choose from: Traditional, Safe Harbor or a SIMPLE Plan. Traditional plans are extremely flexible and allow employers to make contribu
