Affordable and Hassle-Free 401(k) Plans for Small Businesses | Saveday

Small businesses save more with SaveDay

As a small business owner, providing a 401(k) plan for your employees is a significant step towards their financial well-being and your company’s growth. However, the cost associated with setting up and managing a 401(k) plan can be a concern. Many companies tack on expensive startup fees, monthly and annual employer costs, per-employee fees, and other buried charges.

But with saveday, you can offer this valuable benefit without any startup cost. Saveday simplifies 401(k) plans for small business owners, eliminating the financial burden and reducing administrative hassle.

5 Ways Saveday Makes 401(k)s Affordable for Small Business

  1. Cost Savings: Saveday’s $0 startup cost removes the financial barrier that deters small businesses from offering retirement benefits. By waiving setup fees, saveday provides a robust savings solution within your budget.
  2. In-House Strategy: Saveday’s fully-bundled strategy eliminates at least 50% of industry average plan costs. With all plan requirements handled in-house, including Registered Investment Advisor, Broker/Dealer, and 401(k) Administrator, we save you money by not charging for revenue sharing with distribution partners.
  3. No Hidden Fees: Unlike competitors, saveday offers transparent pricing and a low AUM fee. We don’t burden you or your employees with monthly, annual, or per-employee fees. More money stays with you and your employees, as it should in retirement planning.
  4. Simple Plan Offerings: Saveday provides simple and flexible plan options tailored to your business’s needs. Whether you’re a sole proprietor or a growing startup, we can customize a 401(k) plan that aligns with your goals. Unlike other providers, we treat all plans equally, ensuring fair access to desirable features.
  5. Seamless Administration: Saveday’s intuitive platform simplifies plan administration. With payroll integration and automated processes for onboarding, contribution management, and reporting, we streamline the administrative tasks associated with a 401(k) plan. Focus on running your business while we handle the rest.

Saveday’s $0 startup cost for a 401(k) plan enables small business owners to offer this vital benefit without financial strain. By providing a 401(k) plan, you support your employees’ financial future and attract top talent to your business. With legislative tailwinds pushing towards mandatory retirement benefits, take the proactive step and offer benefits today to avoid state-mandated deadlines and penalty fees. Trust saveday to make retirement planning accessible, affordable, and hassle-free for your business.

Setting Up a 401(k) as a Small Business: Key Requirements and Restrictions

As a small business owner, you may be considering the benefits of offering a 401(k) plan to your employees. You may live in a state that is mandating businesses to offer retirement plans and are investigating private plan options. Whatever your situation, saveday is here to help navigate the dos and don’ts of sponsoring a retirement plan.

 A 401(k) plan is a popular retirement savings method that provides tax advantages for both employers and employees. However, before diving into the world of retirement plans, it’s important to understand the key requirements and restrictions associated with setting up and managing such a plan.

Who can set up a 401(k) plan?

A 401(k) plan can be established by various types of small businesses, including sole proprietorships, partnerships, limited liability companies (LLCs), corporations, and certain non-profit organizations. The eligibility to set up a 401(k) plan depends on the structure and nature of the business. To learn more you can read the IRS 401(k) page here, but we’ve listed the key considerations below…

Key Considerations:

  1. Eligibility: A 401(k) plan must be offered to all eligible employees, which includes part-time workers, as long as they meet specific criteria such as age and length of service. Ensuring compliance with eligibility requirements is essential to avoid discrimination issues. Saveday can help you navigate the eligibility criteria and ensure that your plan is inclusive and compliant.
  1. Contribution limits: The IRS sets annual limits on the amount employees can contribute to their 401(k) accounts. For 2023, the elective deferral limit is $20,500, with an additional catch-up contribution of $6,500 for individuals aged 50 or older. These limits are subject to adjustment by the IRS in subsequent years. Saveday’s platform enables easy tracking of employee contributions and ensures that they stay within the IRS limits.
  1. Employer Contributions: While not mandatory, employers have the option to make contributions to their employees’ 401(k) accounts. These contributions can take the form of matching contributions or profit-sharing contributions. However, there are rules and limits governing employer contributions, including non-discrimination requirements. Saveday can assist you in designing and implementing an employer contribution strategy that aligns with your business goals and maximizes employee benefits.
  1. Vesting: Vesting refers to the ownership of contributions made by the employer. The IRS has specific rules on vesting schedules, which determine when employees have full ownership of employer contributions. Understanding vesting schedules is crucial for both employers and employees. Saveday can help you establish vesting schedules that are fair and compliant with IRS regulations.
  1. Testing and Reporting: The IRS requires certain tests to ensure that the 401(k) plan does not disproportionately favor highly compensated employees. These tests include the Actual Deferral Percentage (ADP) test, Actual Contribution Percentage (ACP) test, and top-heavy testing. Additionally, annual reporting of the plan’s activity is required through Form 5500, which provides transparency and accountability. Saveday offers complimentary custodial services – which means we do all the reporting and filing for you, at no additional cost.
  1. Fiduciary Responsibilities: As a plan sponsor, you have fiduciary responsibilities to act in the best interests of the plan participants. This includes prudently selecting and monitoring investment options, providing plan information to participants, and ensuring compliance with Employee Retirement Income Security Act (ERISA) regulations. Saveday can act as your ERISA 3(16) and 3(38) fiduciary, relieving you of some of these responsibilities.

Starting a 401(k) at $0 Cost to Your Business

By partnering with saveday, you’ll not only set your small business on the path to a successful 401(k) plan, but you’ll also empower your employees to achieve a secure retirement. With our expertise and personalized guidance, saveday becomes your trusted ally in navigating the complexities of 401(k) plans. We’ll ensure that you meet all key requirements, comply with regulations, and provide your employees with valuable benefits.

Don’t wait any longer to take the first step towards offering a competitive retirement savings option for your employees. Contact saveday today and discover how our services can make a significant difference in your small business. Together, we’ll create a plan that meets your unique needs and helps your employees build a solid financial future. Your commitment to their well-being will set your business apart and contribute to their long-term success. Let saveday be your partner in making it happen.

401(k) Plan vs. State-Sponsored Plans: Maximizing Small Business Success with Saveday

401(k) plans vs. State Plans

401(k) Plans vs. State-Sponsored Plans, which one is best? As more states implement legislation in response to the SECURE 2.0 Act, which mandates small businesses to offer retirement benefits, many owners find themselves searching for private providers or considering state-sponsored plans.

When facing deadlines and penalties, the allure of state plans as simple and affordable options can be tempting.

But don’t be deceived! State plans have limitations, lack customization, hide fees, and may not adequately prepare for retirement. This leaves employees seeking additional investment options.

Now, let’s delve into the distinctions between state-sponsored plans and saveday’s 401(k) plan.

State Plans: Traditional Yet Limited

State-funded plans typically offer only Roth IRAs. With Roth IRAs, or Individual Retirement Accounts, employees contribute post-tax dollars, which means their money is generally tax free at the time of withdrawal. 

There are some downsides to only offering IRAs in your retirement benefits plan. IRAs exclude high-income earners and have a maximum annual contribution limit of $6,500 in 2023, or $7,500 for those over 50. They are generally considered to be insufficient for retirement planning alone, meaning those who contribute to IRAs typically have to find another way to save money for retirement. In addition, many state plans tack on additional fees associated with plan management, which can make them a less attractive option than they appear. 

On the positive side, state plans offer a straightforward solution for businesses seeking a retirement plan without extensive setup requirements. Enrollment in the state-sponsored plan means businesses will be compliant with state mandates, and can avoid costly penalty fees. 

However, businesses often encounter limitations such as restricted investment options and a lack of personalization to align with specific business goals. Additionally, state plans may incur higher administrative costs, impacting your bottom line in the long run. State plans are also ineligible for SECURE Tax Credits, which can compensate for up to $16,500 in plan costs during the first three years of sponsoring a plan. 401(k) plan sponsors are eligible for these credits.

Saveday 401(k): Revolutionizing Retirement for Small Business

Let’s look at the features of a 401(k) that make it a compelling choice for small business owners:

1. Zero Cost for Employers

That’s right! It costs employers nothing to sponsor a retirement plan through saveday. This is retirement planning the way it was supposed to be – with no middle man, no start-up costs or hidden fees, and no hassle. We cut administrative costs so that retirement benefits are accessible to everyone, and so small businesses can put that money back into their operations. 

2. Personalized Guidance

State plans are cookie cutter, with IRAs treating everyone the same. Saveday offers Traditional and Roth plans, with a Risk Assessment that helps employees select the portfolio that’s best for them, and daily auto-rebalancing to protect portfolio health.

3. Empowering Employees

With saveday, employees can contribute up to $22,500 in 2023. Having the ability to contribute more into their retirement accounts puts employees much closer to their retirement goals than with an IRA. But that’s not all. Employees can also enjoy employer matching, profit sharing, and vesting schedules unavailable in state plans.

4. Streamlined Administration

Saveday simplifies the administrative burdens associated with managing a 401(k) plan. Our intuitive platform automates key processes, reduces paperwork, and offers seamless integration with payroll systems. Say goodbye to the headaches of complex plan administration and enjoy a streamlined experience that saves you time and effort. 

Claim Your Victory with Saveday

In the comparison of State Plans versus offering a 401(k) through saveday, the clear victor emerges for small business owners seeking a retirement plan that maximizes benefits and flexibility. While State Plans seem convenient, saveday is the small-business retirement planning solution. 

Empower your small business and provide your employees with a retirement plan that aligns with their aspirations. With saveday, retirement planning becomes an exciting journey that leads to a brighter future for all.

Looking to learn more? Expand your small business savvy by reading more of our blog here!