To start a 401(k) plan for a business, you must:
How to Start a 401(k) Plan for a Business FAQs
A 401(k) plan is a retirement plan offered by an employer designed to help employees save for retirement.
To start a 401(k) plan for a business: decide who will oversee the plan, create an outline, arrange a trust for the plan’s assets, design a recordkeeping system, and distribute information to employees
The cost of setting up and maintaining a 401(k) plan depends on the provider and the size of your business. However, many providers offer cost-effective solutions for small businesses.
The primary benefit of a 401(k) plan is that it allows employees to save for retirement on a tax-advantaged basis. Additionally, employers may be eligible for certain tax credits when they set up these plans.
Employer contributions are not required but can be beneficial in terms of attracting and retaining valuable employees and increasing employee contribution rates into the plan. Some employers choose to partially or fully match employee contributions up to a maximum percentage each year.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.