Welcome to part 3 of our blog post series! As a quick recap, in part one of our blog series, we debunked four common misconceptions surrounding 401(k) plans. In part two, we looked at all the things that should be considered when choosing a 401(k) provider.
Now, in part 3, we’re going to take you through what setting up a 401(k) for small businesses looks like.
What To Expect When Opening A 401(k) Plan
Setting up a 401(k) plan is quick and easy, and can be done at any time. It’s a straightforward process and can be completed in as little as a day, so you can get your plan up and running in no time.
Once you have chosen your 401(k) provider and have reached out to inquire about starting a 401(k) plan, a plan advisor will reach out to you and begin the conversation around getting it set up. They will ask you questions about you and your business (such as how many employees you have, how many will be participating, etc.) to get a better understanding of your needs and how they can help.
Choosing and building a plan
When it comes to choosing a plan, you can choose between a Safe Harbor 401(k), SIMPLE 401(k), or customize your plan to meet your needs. If you are a solopreneur, a Solo 401(k) may be a good option. You also have the option of electing a Traditional 401(k), Roth 401(k), or both account types in your plan — there are unique tax advantages with both. Your advisor will go over all of these options, explaining the difference between each, and answering any questions you have.
Together with your plan advisor, you will decide which plan is the best option for your business. You will then work together to decide on which features and plan options you want to include, such as employer matching or automatic enrollment.
Once you have created your ideal 401(k) plan, your advisor will create a plan document for you to sign. Once signed, the plan will become active.
Integrating your 401(k) account with your payroll provider is an integral part of setting up your plan. Your 401(k) provider will work with your payroll provider to take care of this for you, so you can sit back and focus on the things you’re passionate about.
After the plan has been set up, all that is left is the management of it. Plan management can include recordkeeping, compliance tasks, government filings, and more. Depending on the provider you choose, you may be responsible for some, part, or none of these responsibilities. Some providers will perform these duties for you but at an added cost. SaveDay does all of this, and more, at no extra cost.
Setting up a 401(k) is simpler than ever before, and with SaveDay as your provider, it can be done all within 15 minutes, with no heavy lifting to you. Contact us to learn more about our $0 employer cost plans.
Photo by DISRUPTIVO on Unsplash.