Information for Small Businesses
Small Employer Credit for Retirement Plan Start-Up Costs - Abstract: For small employer retirement plans, a tax credit of up to 50% of the first $1,000 in "eligible start up costs" may be available to offset establishment and administration costs. This credit is available for each of the first three years of the plan.
SEPs vs 401k Safe-Harbor - Abstract: This chart compares a SEP with a safe-harbor 401k plan and is especially important for employers who must cover participants other than just the owners.
Small Businesses Are Boosting Benefits of Their 401k Plans - Abstract: Vanguard issued its fourth annual How America Saves: Small business edition, an extension of its defined contribution publication. The report analyzes small business 401k plans and finds that small business plans, like their large corporation counterparts, are increasingly implementing best-in-class design features to improve the retirement readiness of their employees.
Small 401k Plans Have Bigger Problems Than Larger Plans - Abstract: Thanks to the quirks of the retirement plan business and how it prices products and services, it's the smaller plans that will have larger problems in terms of compliance and cost. This article is all about letting small 401k plan sponsors learn why they can't ignore their role as a plan fiduciary.
Directory of Solo 401k and Small Business Retirement Plan Providers: Click here to download.
Solo 401k Calculator available here.
A glossary retirement plan and investment terms available here.
401k Plans for Sole Proprietorships
Regulatory reform now allows Sole Proprietorships to set-up and contribute to a 401k plan. These are often called Solo 401k or Individual(k) plans. A number of vendors are beginning to market specific plans to meet this need.
We have put together a list of providers that offer these plans. Click here to obtain a copy of this list.
Calculator available. Click here to calculate how much you can contribute to a Solo 401k in comparison to a SEP or SIMPLE plan which have different limits.
General Features of a Solo 401k Plan:
||Sole proprietors with no additional employees other than the spouse of the proprietor or partnerships whose only employees are self-employed partners and their spouses.
|Trustee and Plan Administrator
||Business Owner, Spouse or Partner or any combination, or any other designated third party.
|Up to $18,000 (not to exceed 100% of pay and no more than $270,000 of pay can be taken into account). Total salary deferral and employer maximum is $54,000.
|Individuals age 50 or older may contribute an additional $6,000 in salary deferrals beyond the $18,000 which does not count towards the maximum total contribution limit of $54,000.
||Up to 25% of pay (20% for self-employed) to a maximum of $54,000. Salary deferral contributions are also counted towards this limit.
||Rollovers and transfers allowed from traditional IRA, SEP, Qualified Plans or Keoghs (Profit Sharing, Money Purchase Pension, Defined Benefit), 401k, 403(b) and governmental 457 plans. SIMPLE IRAs are eligible for rollover after two year holding period is met.
||Available to all participants, including unincorporated business owners.
401k plans are subject to numerous and complex rules, regulations and tax qualification requirements. Be sure to consult with a qualified professional before making any decisions.
Information on Small Business Plans
Starting a small business retirement savings plan can be easier than you think. Here are some resources on a varity of retirement plans available to the small business person.
Employer Retirement Plans Comparison Chart for Small Businesses - Summary: This chart provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners. Focus is on the areas that are important to the business owner to ensure that the plan that is chosen is the plan that is most suitable for the business.
Retirement Plan Comparison Chart
IRS Publication 560, Retirement Plans for Small Business.
DOL's 401k Plans for Small Businesses
401k Plans for Small Businesses
Choosing a Retirement Plan for Your Small Business - Summary: In this piece you will find a chart outlining the advantages of each of the most popular types of IRA-based and defined contribution plans and an overview of a defined benefit plan.
Retirement Plans FAQs Regarding SEPs
FAQs Regarding SIMPLE IRA Plans
SEP IRA Quick Reference Guide
SEP Retirement Plans For Small Businesses
SEP Vs SIMPLE IRA - Summary: This reference guide provides a comparison of some of the key features and benefits of these plans.
SIMPLE 401k Plans
SIMPLE IRA vs SIMPLE 401k's
Simple IRA Plans for Small Businesses