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Category: 401(k) Plan Information

Get the most up to date 401(k) Plan Information from Ubiquity Retirement & Savings. Find the most recent rules and regulations, made easy to understand, along with tips and advice from our team of 401(k) planning experts. Free consultation- call Ubiquity today at 855.466.5825.

Although being your own boss is great in many ways, one glaring drawback is the lack of a group retirement plan. However, there are savings instruments available that can help you meet your retirement goals even if you are self-employed. One of the best ways to prepare for your future is via a solo 401(k). This type of 401(k) plan goes by different names, including Single(k)®, self-employed 401(k), individual 401(k), or one-participant 401(k).

What Is a Solo 401(k)?

A solo 401(k) is a type of retirement plan that allows self-employed individuals and small businesses with no employees to save for retirement. Ther are some similarities:

  • Contributions are made pre-tax, reducing your taxable income for the year
  • If you have an IRA already set up, rolling over into a solo 401(k) will allow you to combine all of your retirement accounts into one place and manage them through one platform–which makes managing taxes easier!

And there are some notable differences from a traditional 401(k):

  • To be eligible, you must be a business owner with no employees (except a spouse)
  • Non-discrimination and top heavy testing do not apply AND do not require an annual 5500 filing unless you have a balance more than $250,000 (or terminate the plan)

Solo 401(k) Plan Benefits

Perhaps the best benefit is that as the business owner, you can make contributions to your retirement account as both the participant and the employer – up to a total of $66,000 in 2023, or up to $73,500 if you are age 50 or older. This is a significant amount of savings each year and can help you build your nest egg fast. But there are many other solo 401(k) plan benefits that make opening a plan worthwhile:

  • Option to take a loan from retirement savings
  • Higher contributions limits than Individual Retirement Accounts (IRAs)
  • Plan administration is extremely low maintenance
  • No nondiscrimination tests
  • Business owners are not required to file annual reports with the IRS until the plan reaches $250,000 in assets.

If your spouse also earns income from your business they can participate in the plan as well, effectively doubling your annual retirement savings. They may contribute to their plan pre-tax up to the IRS limits, and as the employer you can contribute up to 25% of their annual compensation.

Don’t forget about solo 401(k) tax savings. These are some of the most compelling benefits for many sole proprietors:

  • Reduced taxable income for pre-tax salary contributions
  • Ability to make after-tax Roth contributions
  • Business tax deduction for plan contributions and plan expenses
  • Pre-tax growth on investments while in the plan

Setting up a Solo 401(k)

If you have an employer identification number, you can open a solo 401(k). To set up a new solo 401(k), the plan adoption agreement must be signed by December 31 to make contributions for that year. All contributions must be made by the business’s federal income tax return due date, including extensions.

Here are additional resources to help you determine whether to open a solo 401(k) plan:

Why Have a Small Business Retirement Plan?

How to Start a 401(k) for Your Small Business

2023 Retirement Contribution Limits


A solo 401(k) is a retirement savings plan for a self-employed or sole proprietor business owner (and spouse, if applicable).  This individual 401(k) plan goes by different names, including Single(k)®, self-employed 401(k), individual 401(k), or one-participant 401(k).

A solo 401(k) plan provides all the same benefits as their larger, traditional 401(k) counterparts. It is a savings vehicle for participants to invest contributions from their paychecks. By playing both roles as both employer and employee, solo 401(k) plans allow self-employed business owners to maximize their retirement contributions. Solo business owners can then gain additional savings by deducting these 401(k) contributions, along with any plan costs, as a business expense.

How to Choose a Solo 401k Provider

Some retirement plan providers expect business owners to leap administrative hurdles that eat up a lot of time and energy. It’s important to find out how much effort setting up a 401(k) requires, and what you need to do. Look for a 401(k) plan that is simple to set up and intuitive for your employees to use.

Questions to ask:

  • Is the plan’s cost affordable?
  • Are there educational resources?
  • Is there an online portal to easily manage the plan?

What to Consider When Choosing a Solo 401k Provider

As you’re looking for a Solo 401k provider, there are several things to keep in mind:

  • Company needs. Do you need a flexible plan? Higher contribution limits? Payroll integration? Retirement education resources?
  • Plan cost. The price tag should be one of the first things on your list when deciding which provider to choose because it can make a big difference in how much money ends up in your pocket at the end of each year. Flat fees tend to save you far more money over time than a percentage-based fee that charges you based on the amount of money in your savings.
  • Level of support available. Are you able to manage your retirement administration on your own? Do you need a provider that offers record keeping?

What Makes a Great Solo 401k Provider?

You want a provider that offers the following:

  • Low, flat fees. The lower your fees, the more of your money will go into investments and be available for retirement.
  • Excellent customer service. You’ll need this if you have questions about setting up or changing plans, or if there’s an issue with your accounts.
  • A variety of investment options. Look for a provider that offers you choices from turnkey, pre-designed investment portfolios to a variety of stocks, bonds, mutual funds, ETFs, and more for those who prefer a self-directed investment.
  • Flexibility in plan design: Your business will not stay the same over the years and your retirement plan should be able to adapt. If you want to add employees, change provisions, or make other changes, those options must be available.

How to Set Up Your Solo 401k

Setting up a solo 401k doesn’t have to be a confusing process. With Ubiquity, it’s easy to get started. Here are some tips for choosing and setting up your Solo 401k:

  • Use a tax credit calculator to see how the government’s credits can help pay for your plan fees
  • Use a salary paycheck calculator to determine how much you can afford to save from each paycheck

When it comes to small business 401(k) plans, due diligence requires that you compare various plans and determine the best ones for your needs. Consider providers specializing in small business retirement plans rather than those whose primary focus is insurance or payroll. Compare each aspect of the various plans carefully for a thorough understanding of service levels and costs.

Finally, don’t forget about deadlines

To establish a plan for a tax year, the business owner must sign a plan document by the last day of the business’s tax year to contribute for that year (e.g., December 31 for a calendar-year business). The document must be signed by December 31 to make contributions for that year. Plans can be opened in a prior plan year as long as it is opened by your tax filing deadline. All contributions must be made by the business’s federal income tax return due date, including extensions.

For more information about Ubiquity solo 401(k) offerings, contact us today.


Ubiquity is not a registered investment advisor and no portion of the material herein should be construed as legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor for advice.

Your choice of a 401(k) provider affects both your and your employees’ futures. Choose the right provider for your small business needs, and your employees can enjoy a secure retirement. Make the wrong choice, and not only can your employees end up with less funding for retirement than anticipated, but you might lose out on significant tax benefits.

Evaluate Your Company’s Needs

For sole proprietorships and solopreneurs, an Individual 401(k) plan like the Single(k)® from Ubiquity offers a simple, low-fee plan to help individual business owners start saving right away.

For businesses with employees other than the owner and the owner’s spouse, a group plan will meet your needs. Most providers offer several types of 401(k) plan so you can select the one that offers the right combination of flexibility, support, and cost.

Ease of Setup and Use

Some retirement plan providers expect business owners to leap administrative hurdles that eat up a lot of time and energy. It’s important to find out how much effort setting up a 401(k) requires, and what you need to do. Look for a 401(k) plan that is simple to set up and intuitive for your employees to use.

Questions to ask:

  • Does the provider offer automatic enrollment?
  • Are there educational resources for employees and business owners?
  • Is there an online portal to easily manage the plan?

Identify Your Employees’ Needs

If problems arise with their 401(k), your employees need to have these issues addressed promptly.

Questions to ask:

  • Does the 401(k) provider offer good customer service, including U.S.-based support by email and phone?
  • Does the plan offer employee education demonstrating its 401(k) value? Employees need to understand how the plan works and its benefits.
  • Finally, does the plan offer employees individualized investment and plan guidance?

A solid 401(k) plan not only helps you keep good employees, but it also goes a long way toward attracting talent.

Available Investments

Employees want diversified investment options so they’re not putting all their eggs in one basket. Help them reduce risk by offering a wide range of choices.

Questions to ask:

  • Does the plan offer mutual funds?
  • ETFs?
  • Direct access to stocks?

Fiduciary Risk

Remember that you bear certain fiduciary responsibilities upon offering a 401(k) to employees. You can avoid legal liability if you make a good choice in 401(k) provider selection.

Your fiduciary responsibility may include plan investment selection and monitoring, diversification for loss mitigation, and benchmarking. The latter concerns evaluating and reviewing the retirement plan regularly.

Questions to ask:

  • Do you want the plan provider to recommend plan investments?
  • Do you want them to actively manage the investments?
  • Is there a type of plan that passes fiduciary responsibility to the plan provider?

Compliance Support

Legal requirements for 401(k)s are complicated. Your plan must remain compliant with the IRS and DOL, and that means ensuring several annual compliance tasks are completed. These include:

  • Preparation of an annual Form 5500 with the DOL and IRS
  • Providing annual sponsor and participant notices
  • Annual non-discrimination testing to show that lower-paid workers are not discriminated against in favor of highly compensated employees

Fee Transparency

When considering retirement plans for your small business, fee transparency is crucial. High administration fees and high-cost funds are obstacles you want to avoid.

Your 401(k) provider must make their fees completely clear for every level of service. Neither you nor your employees want unexpected fee surprises. For instance, automatic rebalancing of the portfolio adjusts holdings to retain the desired asset allocation. Most 401(k) plans do not charge for this service, but there are some that do.

Some providers are hiding extra fees in plain sight by making them sound ordinary or innocent. A great example of this is a fee called employee pricing. Sounds innocent enough, right?

But this employee pricing is really a fee based on the total amount of money in your account, otherwise known as a percentage fee. This means the fee you pay gets bigger as your money grows…which it likely will do, based on how the stock market has performed historically over a 20-30-40-year time period.

In industry jargon, an employee pricing percentage-based fee is really an asset under management (AUM) fee. And it can erode your nest egg in a sneaky way. Not so innocent, now, is it?

Find out which services are included in the basic fee and which are add-ons. Ask about any annual fees beyond your base charges.

Questions to ask:

  • What are the fees? Is there an AUM or percentage-based fee?
  • Are there flat fees?
  • Which fees are paid by the employer, and which fees are employees expected to pay?

Make Comparisons

When it comes to small business 401(k) plans, due diligence requires that you compare various plans and determine the best ones for your needs. Consider providers specializing in small business retirement plans, rather than providers whose primary focus is insurance or payroll. Compare each aspect of the various plans carefully for a thorough understanding of service levels and costs.

For more information about Ubiquity 401(k) offerings, contact us today.

Thinking about switching your retirement plan provider? How do you know if it’s time to go with another company? Perhaps employees voice concerns about the provider. Maybe you are doing more of the work on the retirement plan than anticipated. Changing providers can take time, but it is worth it in the long run for your company and your employees if your current provider just isn’t meeting your needs.

There are several different types of 401(k) plans available. When comparing potential providers, make sure you are comparing apples to apples.

Here are some of the major reasons to consider switching:

1. Your State Plan Isn’t Cutting It

If you live in a state that has a retirement plan mandate for small businesses, you may have opted into the basic plan offered by your state. But most of these plans are just a cookie-cutter IRA with limited savings opportunities for participants and zero tax credits for employers. If you want to save up to three times more per year than you can with an IRA or are looking for a plan whose government tax credits cover the cost of setup and administration, investigate a Ubiquity 401(k):

  • Ubiquity 401(k) 100% complies with every state’s mandated requirements
  • Ubiquity 401(k) saves you more in personal and business taxes than any state plan while lowering taxable income
  • Ubiquity 401(k)s plug-n-play payroll integration saves time and prevents stress by integrating payroll and automating plan administration
  • Only Ubiquity 401(k) plan offers flat fees, not a fee that increases as your retirement balance grows
  • Ubiquity 401(k) is not tied to the state mandate but does comply with it.  Protect your retirement money by choosing a private option the state cannot touch to pay off special interests

2. Cost Savings

When comparing 401(k)s for your small business, how much you’ll be paying is, of course, a top consideration. Plan fees reduce your employees’ investment returns. The latter is unpredictable, but the former is not.

How do the fees you are currently paying compare to other providers? Are your current provider’s fees transparent, or do sneaky fees appear? Without fee transparency, determining just how much you’ll pay in fees becomes difficult. No one wants to pay unexpected fees, and they shouldn’t have to.

3. Support

A small business needs more support from its 401(k) provider than larger businesses, but such support is often inadequate. Is your 401(k) provider giving you the service and support level you need?

Running your business is your top priority, not performing 401(k) fiduciary obligations. Your 401(k) provider cannot reduce all your fiduciary duties but can help reduce the amount of time you are involved by making certain decisions.

Have you experienced snags with your provider regarding compliance issues? Have there been delays in timely reporting? Are your company’s needs being met regarding nondiscrimination testing and IRS reporting? If you find your 401(k) provider’s support insufficient or not timely, look into switching providers.

4. Lack of Payroll Integration

Connecting your 401(k) to your payroll avoids many of the errors that can occur when payroll and retirement plans are not integrated. The recordkeeping involved with payroll integration reduces the plan’s administrative load and aids in report generation. In turn, this integration assists you in meeting the plan’s fiduciary requirements.

5. Investment Options and Performance

When it comes to retirement plans for your small business, investment options and performance play a critical role. If your current 401(k) provider’s investment options consist primarily – or solely – of target-date mutual funds, your employees deserve more.

What about investment performance? Market fluctuations are part of investing, but if your 401(k) provider’s returns lag competitors year after year, your employees deserve better. Keep in mind that mutual fund fees are costlier than alternatives such as exchange-traded funds (ETFs).

Does your plan offer brokerage accounts so employees can choose from a full range of investment options?

6. Employee Engagement

How many of your employees participate in your 401(k) plan? Do you feel the percentage isn’t high enough? After all, a 401(k) plan is the largest source of retirement income for most people.

A 401(k) provider is supposed to educate employees and help them enroll in the plan. Does your current provider offer resources to educate employees about the benefits of participating, investment types and objectives, budgeting, and other basics, or are your employees mostly left to figure things out on their own?

Employees depend on their 401(k) provider to help them understand how their 401(k) works and all about its benefits. Are they confident or concerned about reaching retirement goals? Do they like their investment choices? Do they understand employer matches or profit sharing?

If your employees are satisfied with your 401(k) provider’s services, maybe you don’t need to switch. If your employees aren’t satisfied, find a 401(k) provider that will boost participation and increase employee engagement.

Here’s a tip: A low 401(k) utilization rate usually indicates that employees aren’t happy with their plan, don’t understand it, or find accessing plan information daunting. You can do better.

The Bottom Line

The right 401(k) plan does more than help employees save for retirement. For your small business, the right plan helps to attract and retain employees. Review your 401(k) plan annually. If your provider isn’t meeting your business’ needs, switching is a wise decision.

If you’re thinking about switching your 401(k) provider, contact the financial advisors for small business at Ubiquity.


Flat fees are charged by Decimal, Inc. for recordkeeping and administrative services. Third-party service providers may assess asset-based fees to customers. Plan Sponsors are advised to review all service agreements with providers (e.g., investment advisors, custodians, broker-dealers) to evaluate total plan costs.

55 million American workers—more than 40% of full-time, private-sector employees—don’t have access to a workplace retirement savings plan. As very few employers offer pensions and Social Security is drying up, with funds expected to be depleted as soon as 2035, the responsibility for saving falls more on the individual than ever before.

Automatic enrollment is a retirement plan feature that enables employers to admit new participants into the plan as soon as they are eligible to participate. Instead of the traditional method of waiting for the participant to meet eligibility requirements and then enrolling manually (or not – many eligible employees procrastinate or forget), this lets employers add new eligible participants quickly and easily.

But why is this so great?

The #1 most significant element to impact a plan balance is the contribution rate.  

Not investments, not management. Simply contributing to a retirement plan makes all the difference, and we designed our 401(k) plan options with this in mind. Here are three compelling reasons why small business owners should embrace the ease that automatic enrollment options bring to your 401(k) plan:

1. Auto-enrollment makes saving easy for employees

Although a 401(k) plan is the second-most popular employee benefit after health insurance, only a fraction of employees actually participate because they believe that enrollment is complicated.

But a plan with the auto-enroll feature removes that complication and gets employees the benefit they want as soon as they’re eligible to enter the plan without the hassle of completing forms. They can start saving for retirement and accumulating earnings on those savings sooner, which means more money for their retirement!

Employees can always opt out but using auto-enrollment has shown to double or even triple the rate of participation, particularly among younger employees and those earning less than $30,000.

2. Auto-enrollment helps employers attract and retain talent

Staying competitive in the job market is vital in today’s economy. It is becoming ever more important to attract and retain employees—and offering free snacks or a ping-pong table is not going to cut it. Instead, salary, healthcare insurance, and a retirement plan are the top three most critical elements job seekers consider.

Giving your employees a way to save for their retirement is a cost-effective and easy way to attract and retain talent and maintain an edge over the competition.

3. Employers whose plans feature auto-enrollment save on taxes

All employers who open a new 401(k) plan may be eligible for substantial tax credits. You can qualify for up to $15,000 in credits just for opening a new 401(k) plan.

And when you add automatic enrollment, you save even more. This one feature can qualify you for a tax credit worth $500 per year for the first three years of the plan.

These tax credits for your business—a total of up to $16,500—can help small business owners like you save for your own retirements.

A few things to remember:

Ubiquity 401(k) plans offer the option of auto-enrollment with or without auto-escalation (i.e., to have their savings amount increase automatically). Participants can opt out of auto-enrollment at any time to:

  • Change their contribution amount
  • Make Roth contributions (if available in the plan)
  • Opt out of participating in the plan altogether

All contributions made through auto-enrollment remain in the participant’s account even if they opt out within the first 90 days. Once a participant opts out of auto-enrollment, they cannot opt back into having their contribution amount(s) increase automatically if auto-escalation is included in the plan; however, they can change their savings amount at any time.

To speak with a retirement expert on which retirement plan is right for your small business, reach out to Ubiquity today.



1 Eligible employers may be able to claim a tax credit of up to $5,000, for three years, for ordinary and necessary costs of starting a 401(k) plan. IRS’ qualifying factors are: you had 100 or fewer employees who received at least $5,000 in compensation from you in the preceding year, you had at least one participant who was a non-highly compensated employee (NHCE) and in the three tax years before the first year you’re eligible for the credit, your employees were substantially the same employees who received contributions or accrued benefits in another plan sponsored by you, a member of a controlled group that includes you, or a predecessor of either. Those plans with automatic enrollment can claim a tax credit of $500 per year for a 3-year taxable period.

Ubiquity is not a registered investment advisor, and no portion of the material herein should be construed as legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor for advice.


While avoiding certain IRS non-discrimination testing is usually the main reason small businesses switch over to a Safe Harbor 401(k), these plans offer additional benefits to employers. Three reasons Safe Harbors are among the best 401(k) plans for small businesses include:

  • Compliance
  • Flexibility
  • Attracting and retaining top talent

As a business owner, implementing a 401(k) plan is perhaps the most popular and effective way to ensure your employees are in a position to retire at a reasonable age.

However, the Internal Revenue Service requires employers who offer 401(k) plans to jump through several hoops, which can make it difficult for business owners (particularly owners of small businesses) to provide the benefit. One of the biggest obstacles in the way of offering a 401(k) plan is the IRS’s annual non-discrimination testing. During this test, the IRS checks to ensure that employers are not unfairly favoring certain employees. If a business fails this test, it can face severe punitive consequences.

As a result, many small businesses are better served by offering a Safe Harbor 401(k) plan, which makes them exempt from certain non-discrimination testing. These plans require mandatory employer contributions, as well as immediate vesting for employees.

#1. Helps Ensure Compliance

When a business offers a 401(k) plan, the IRS ensures the business does not unfairly favor highly-compensated employees (HCEs) through non-discrimination testing, performed annually. To do this, the IRS compares plan participation and contributions of every employee in the business, from entry-level employees to the owner.

According to the IRS, traditional 401(k) plans must follow these three rules to avoid failing the non-discrimination testing:

  • HCEs cannot contribute greater than 2% of the average contribution of all other eligible employees. For example, if the average employee is contributing 4% of their income to the 401(k) plan, HCEs may not exceed 6%.
  • HCEs cannot receive more than 2% in contributions compared to the average employee. For example, if the average employee is receiving 2% of their income in contributions to their 401(k) plan, HCEs may not exceed 4%.
  • The combined assets of key employees’ (owners and officers) retirement accounts cannot exceed 60% of the employer’s entire 401(k) plan.

If a business’ plan fails these tests, it may be costly to correct. While larger businesses may have the ability to balance these requirements, it can be difficult for smaller businesses with limited manpower to stay in compliance.

A Safe Harbor 401(k) plan is designed to meet these requirements without any extra effort. And since Safe Harbor 401(k)s offer the same contribution maximums as traditional plans, HCEs can maximize their contributions without the plan failing the non-discrimination testing.

#2. Provides Flexibility

For small businesses, flexibility is one of the most important factors to consider when choosing a retirement plan. Safe Harbor 401(k) plans provide this flexibility with three different options:

  • Basic Matching:

The Safe Harbor is a tiered match where the employer matches 100% of the contributions up to 3% of the employee’s compensation, and 50% of the employee’s deferrals up to the next 2% of compensation.

  • Enhanced Matching:

If the business chooses an enhanced matching plan, it will match 100% of an employee’s contributions, up to a certain percentage of compensation (minimum of 4%).

  • Nonelective Contributions:

Under a nonelective contribution plan, the employer contributes 3% of compensation to the employee’s 401(k) account, whether they choose to participate in the plan or not.

These percentages are minimums – if the business wishes to contribute more to its employee’s plans, they are free to do so.

#3. Helps Attract and Retain Talent

Another reason businesses choose to offer Safe Harbor 401(k) plans is to improve their ability to attract and retain top talent. In a competitive market, benefit plans allow employers to differentiate themselves from other employers. With a Safe Harbor 401(k) plan, employees are guaranteed an employer-contributed retirement account, which can greatly assist in the hiring process.

Moreover, top talent is more likely to be retained with a Safe Harbor 401(k) because the plans allow highly compensated employees to maximize their contributions without the fear of refunds or corrections that usually are associated with 401(k)s. Combined, these factors give small businesses a leg-up on their competition.

Contact Ubiquity for a free Safe Harbor consultation and learn how a Safe Harbor 401(k) can help your business.




Along with competitive compensation and robust healthcare benefits, offering a retirement savings package such as a 401(k) is a crucial way for large and small businesses alike to attract and retain top talent.

Implementing a plan is more affordable than ever, and you’ll receive a tax credit for plan startup costs and a tax deduction for expenses paid.

But how do you start a 401(k) for your small business? Here’s a step-by-step overview of where to begin, along with answers to some common employer FAQs.


5 Steps to Starting a 401(k) for Your Small Business

The IRS heavily regulates the process of establishing and maintaining a 401(k). As a result, many small businesses outsource the job to a knowledgeable small business financial advisor to set up and administer the retirement plan throughout its life.

Still, every owner should understand the steps involved in starting their small business 401(k):

  • Decide Which Plan You Should Establish

Will you offer a traditional, simple, or safe harbor 401(k) plan? Or maybe a simple IRA plan is best for you. There are plenty of 401(k) plan types to choose from, so it’s essential to do your homework and determine the plan that fits your immediate needs and long-term goals.

  • Understand Your Fiduciary Responsibilities

While you’re not responsible for how your employee’s 401(k) selections perform, you are responsible for acting as a fiduciary. That means you’re legally bound to make choices about your 401(k) plan as a person who owes a duty of care and trust to your employees.

Part of acting on your fiduciary responsibilities is setting up a trust for your plan’s assets and appointing at least one trustee to manage the plan investments, distribution, and other activities. This helps ensure the funds’ use solely benefits your employees and their beneficiaries.

  • Draw Up a 401(k) Plan Document

This document outlines your plan’s details in compliance with the IRS. It should contain information including (but not limited to) details about your trust, fiduciaries, your contribution plans, and more.

  • Establish an Organized Recordkeeping Process

You’ve drawn up the plan document and cleared it with the IRS. Now, keeping meticulous records documenting the progress of that plan is essential, including information about plan values and employee contributions. In addition, you must regularly update your participants’ census and employment data to ensure they’re still eligible for their 401(k) benefits.

  • Create a Thorough Information Package for Your Plan Participants

The law requires that employers provide information to their participants about how the plan works, its features, and its benefits. It’s also essential to disclose information to both your employees and the IRS about any fees and investment changes (if applicable).


FAQs for Starting Your Small Business 401(k)

Q.) How much will it cost to set up a 401(k) for my small business?

Initial fees typically run anywhere from $500 to $3K. How much you’ll pay depends upon the type of benefits you choose, the size of your business, consultation fees associated with your retirement service provider (if applicable), and more. For more information, click here for the Department of Labor’s retirement plan fees and expenses guide.

Q.) How long does it take for a small business to set up a 401(k)?

That all depends upon how thorough you are. If you submit your plan with missing or incomplete information, it could mean several time-consuming rounds with an Implementations Specialist to get the correct information uploaded. You could also end up paying fees because of mistakes you accidentally made from rushing through the details of your plan.

Q.) How much should I contribute to the plan?

You can contribute as much as you’d like within IRS limitations. Remember that employer contributions are tax deductible on your small business’s federal tax returns. Just as importantly, think about the positive impact matching or profit-sharing will have on morale, your relationship with your employees, and your employee’s financial health.

Q.) How much should participants contribute?

Participants may contribute as much as they wish within IRS limitations. Encourage your employees to research the investment options available and educate them on the benefits of a 401(k) to help make comfortable retirement a reality.

Q.) What are the maintenance costs for maintaining a 401(k)?

Once you select a 401k for your small business and get it up and running, you’ll need to pay fees associated with ongoing operations, services, investments, and expenditures for matching contributions.

Starting a 401(k) promotes employee morale, which leads to improved retention and a better ability to attract new talent. It also helps contribute to your and your employees’ financial well-being. The knowledgeable professionals at Ubiquity are here to assist with customizing a low-cost, easy-to-manage retirement plan for your small business.




With the end of the year fast approaching, many small business owners are looking for tax savings. December is not too late to open a new 401(k) account, convert to a new retirement account type, or make contributions. Depending on your situation, you may have more time than you think to plan the ideal tax scenario for 2022.

If you’ve put off thinking about your retirement until the end of the year, here are a few reasons to act now:

ONE: Generous contribution allowances will help you save for retirement

A 401(k) account offers much higher contribution limits than most IRAs : some of which max out at just $6,000. SEP IRAs do not allow employee contributions, so you may not be able to save as much as you’d like. In 2022, the annual 401(k) limit is $20,500 for employees or $61,000 for employer/employee totals, plus an additional $6,500 if you’re age 50 or older.

TWO: You’ll start compounding interest sooner rather than later

When you invest in a 401(k), the money you add generates interest. This interest compounds year after year, as you earn interest on your interest.

Here’s an example. Let’s assume a very modest ability to save and a so-so economy returning just 5 percent. If you were to put in $5,000 this month and contribute just $100/month to your 401(k), in 30 years’ time you could have $105,924 saved for retirement.

On the other hand, say you put in the maximum of $61,000 today and contribute at least that much every year for 30 years. You’d be sitting on $4.2 million or more for retirement.

How much will you pay for 401(k)? Get an instant quote.

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Or schedule a free consultation with a retirement specialist.

THREE: You had a particularly profitable year

Some 401(k) plans allow you to make a year-end contribution deposit directly into your account to reduce how much tax you owe for 2022. That can really boost your retirement savings without cutting into your regular paychecks.

FOUR: You want to get on track for next year

Opening a 401(k) now will help you attain your New Year’s resolution to save more for retirement in 2023. Establishing an account with a generous contribution level is one of the best ways to achieve a comfortable future. If you want to hit the maximum for 2023, you can save up to $1,708.33 per month (for an annual total of $20,500). If you’re age 50 or older, you can put in an extra $541.66 a month ($6,500 total). If you are self-employed, you can contribute as both employee and employer up to a maximum of $61,000 a year, plus the contribution for those age 50 or older.

The deadline is coming up

If you are self-employed with no full-time regular employees working for you (with the exception of a spouse), then you could qualify for tremendous tax savings with a Solo 401(k) account. You will be able to contribute as both employer and employee.

This means you can deposit a maximum of $61,000 (plus $6,500 more if you are over 50 years old) for yourself, which will then reduce your taxable income for 2022. You can also add your spouse to double your household savings if your spouse is not covered by another plan.

All you have to do is sign the Solo 401(k) adoption documents by December 31, 2022, and you will have until your tax return due date (April 17, 2023) to make the contributions for 2022. It is possible to apply for extensions to have until October 17.

If you’ve had a very lucrative year, you can also concurrently contribute money each month to put toward your 2023 return. If not, you can always take your time and save for the upcoming year well into 2024 in the same fashion, filing for tax return extensions if necessary.

The deadline for opening a traditional 401(k) plan is later!

The SECURE Act brought good news for employers: an extended deadline for adopting a new traditional 401(k) plan! You used to have until December 31, but now you have until the tax return deadline, including extensions. Here’s what those 401(k) contribution deadlines look like for the 2022 tax year:

  • 12/2/22: Convert a traditional 401(k) into a Safe Harbor for 2022 with 3% nonelective contribution
  • 3/15/23: Adopt a 2022 traditional 401(k) plan if you are taxed as a Partnership or S-Corp
  • 4/17/23: Adopt a 2022 traditional 401(k) plan if you are a Sole Proprietorship or C-Corp
  • 9/15/23: Adopt a 2022 traditional 401(k) if you filed an extension as a Partnership or S-Corp
  • 10/16/23: Adopt a 2022 traditional 401(k) if you filed an extension as a Sole Proprietorship or C-Corp
  • 12/31/23: Convert a traditional 401(k) plan into a 4% nonelective Safe Harbor plan for 2022
  • Employees do not have more time to make salary deferrals, but employers have more time to decide whether they want to make a year-end profit-sharing contribution. Adding a Safe Harbor amendment to your plan is a great option if you worry you might not pass nondiscrimination tests for the year. Fortunately, you have plenty of time to make this decision.

Planning for the 2023 Plan Year

Now is also a good time to plan for the 2023 tax year using the following deadlines:

  • 11/2/22: Notify SIMPLE IRA participants that their plan will convert to a new 401(k) plan on 1/1/23
  • 12/2/22: Notify participants that the traditional 401(k) will convert to a matched Safe Harbor in 2023
  • 12/31/22: Plan your conversion of an existing 401(k) to a match-based Safe Harbor for 2023
  • 10/1/23: Adopt a new Safe Harbor 401(k) plan for 2023
  • 12/2/23: Convert a traditional 401(k) plan to a 3% nonelective Safe Harbor for 2023
  • 3/15/24: Start a new traditional 401(k) for 2023 if you’re an S-Corp or Partnership
  • 4/15/24: Start a new traditional 401(k) for 2023 if you’re a C-Corp or Sole Proprietorship
  • 9/15/24: Start a new traditional 401(k) for 2023 if you’re an S-Corp or Partnership with an extension
  • 10/15/24: Start a new traditional 401(k) for 2023 if you’re a C-Corp or Sole Proprietor with extension

If you have any questions about setting up a small business 401(k), contact Ubiquity to administer the plan.

The June 30, 2022, CalSavers enrollment deadline has passed. California businesses that have at least five employees and that have not yet enrolled in CalSavers or adopted a custom retirement savings plan now face penalties beginning at $250 per eligible employee if the business remains non-compliant for 90 days after it receives a violation notice from the State.

California small businesses that have missed the deadline can still save on their taxes for this year if they act quickly and choose to either opt in to the CalSavers 401(k) or, alternatively, start their own private 401k retirement plan. In many cases, a customized, low-cost 401(k) savings vehicle may provide more tax benefits, greater savings, and increased employee satisfaction than the state-run CalSavers program.

How will California enforce penalties on small businesses that have missed the CalSavers deadline?

Legal challenges to the CalSavers Law have all been dismissed or denied, which leaves California businesses with the option of enrolling their employees in CalSavers or adopting their own 401(k) plan. Companies that fail to do so will be fined by the CalSavers Retirement Savings Board, which is partnering with the State’s Franchise Tax Board (FTB) to levy penalties on non-compliant businesses.

Why might a small business choose a custom retirement plan over CalSavers?

Although it may seem simpler for a small business to choose the default CalSavers option, doing so may forfeit significant benefits that are available as part of a custom plan.

There are important differences between the state-sponsored plan and a Ubiquity 401(k). A 401(k) solution provides employers with the opportunity to maximize their contributions and tax savings while helping their employees save for the future. With a 401(k) plan you can contribute 3 times more than with an IRA, and there are other important customization options that a 401(k) plan enables.

Consider the following, for example:

  1. A 401(k) allows employees to contribute more than three times the contribution limit of the CalSavers option.
  1. Federal legislation known as the SECURE Act incentivizes small businesses to establish qualified retirement plans by giving them up to $16,500 in tax credits.
  1. Unlike CalSavers, which charges employees an asset-based fee for administering their retirement savings, a private plan can be established on a flat-fee basis, which will give employees greater fee savings.

What other important differences between the state run program and a 401(k)?

There are several critical differences between these plans. Beyond the extra savings any participant can build with a 401(k), employer contributions are allowed as well, meaning small business owners can use this contribution to reward and incentivize employees. This includes an additional employer contribution of up to $40,500 to their own accounts. This chart lays out even more differences between the two types of plan:

Table comparing the CalSavers retirement IRA versus the Ubiquity 401(k) including 3X more savings and up to $16,500 in tax credits for small business owners with a Ubiquity 401(k)

Choose the better plan for your small business and your retirement. Open a Ubiquity 401(k) to satisfy the mandate, save more, lower your taxable income, earn business tax credits, and retain top talent. Call 866.634.6116 or schedule a free consultation with a retirement specialist.

Every month holds important deadlines for employers offering small business 401(k)s. Fortunately, plan administrators at Ubiquity are dedicated to helping you achieve maximum results for your retirement savings and remain in compliance with IRS guidelines. The following checklist will help you prepare for the road ahead, and you can also use our 401(k) compliance calendar to stay on top of any deadlines.

2022 401(k) Deadlines

January 1: Safe Harbor match begins.

If you opted for a Safe Harbor 401(k) plan for the year, you can begin matching funds now.

January 15: It’s census data time!

To aid with compliance tests, send your recordkeeper the name, birth date, date of hire, termination date (if applicable), hours worked, compensation, and contributions for every employee.

January 31: Send forms to distribution recipients.

Employers must send Form 1099-R to plan participants who received distributions last year.

February 15: Send Q4 participant statements.

All plan participants are entitled to receive regular statement updates to track plan balances.

February 28: File Form 1099-R with the IRS.

The IRS requires hardcopy Forms 1099-R by this deadline.

March 15: Process corrective distributions for failed tests.

If you failed last year’s ADP or ACP tests, this is the last day to refund portions of the plan balance back to highly compensated employees and/or make additional distributions to lower paid employees to bring the plan into compliance. Failure to meet this deadline results in a 10% penalty and requires employers to file Form 5330.

March 15: If you’re an S Corp or LLC Partnership, file your taxes.

Not only will you need to file your taxes by this day, but you will also need to deposit all employer contributions to receive a tax deduction for the year unless you have petitioned for a six-month extension.

March 31: File Form 1099-R electronically with the IRS.

Employers must report distributions for the 2021 calendar year by this date.

April 1: Initial RMDs are required for participants turning 72 on or after January 1, 2022.

The year participants turn 72, they must make a first withdrawal from their 401(k) by April 1, 2022. In subsequent years, they can wait until the end of the tax year to take a distribution.

April 15: 402(g) refunds are distributed.

Participants who over-contributed must receive 402(g) excess deferral refunds by this deadline. It can be especially common among people who contributed to more than one employer 401(k) plan in a given year. Failure to meet this deadline could result in a tax penalty for the employee and operational error issues for the plan.

Limits for 2021 were $19,500, plus $6,500 allowed for those age 50 and older. This year’s plan limit increased to $20,500.

April 15: If you’re a C-Corp, Sole Proprietorship, or LLC Corporation, file your taxes.

Unless you received an extension, you’ll need to file your taxes and deposit employer contributions by this date.

May 15: Send Q1 statements to participants.

Employers must send the first quarter of 2022’s statement balances to participants before this deadline.

June 30: Correct distributions for EACA plans.

If your plan contains an Eligible Automatic Contribution Arrangement (EACA) and you failed ADP or ACP tests, make corrective distributions by this date to avoid the 10% IRS penalty and Form 5330 filing.

July 31: Report financial updates to the IRS using Form 5500.

Plan providers typically file these forms on your behalf, but we’ll need a signature. To request an extension, fill out Form 5558 by this date.

July 31: Communicate updates on any terminated employees using File Form 8955-SSA.

Any plan participants who are separated from service – either due to termination or voluntary withdrawal – must be reported to the IRS, with benefits due at retirement age.

July 31: File Form 5330 related to an error from last year.

If you made a mistake in 2021, you can file Form 5330 up until this date.

NEW! July 31: Submit a cycle 3 plan document restatement.

Your plan provider will submit a fully updated plan document that is rewritten to reflect any recent changes in legislation. This restatement does not apply to individually designed plan documents, 403(b) plans, or government plans.

August 15: Send Q2 statements to participants.

Employers must notify all participants of the second-quarter statement balance.

September 1: Send Safe Harbor notices for new plans.

Employers must notify participants they’ve added a Safe Harbor provision, which will become effective October 1, 2022.

September 15: If you’re an S Corp or LLC Partnership with an extended tax deadline, file now.

Final employer contributions are due now if you’ve received the six-month tax extension. You’ll also be able to receive your tax deduction for last year’s taxes at this time.

September 30: Send the Summary Annual Report (SAR) to all plan participants.

Similar to Form 5500, the SAR provides a summary of the plan’s financial status. It is possible to file for a two-and-a-half month extension if you are filing a Form 5558 to extend your 5500 filing.

October 1: Review your RMDs.

Before the year’s end, you’ll want to review the list of participants who need to take distributions by December 31, 2022.

October 1: Add a Safe Harbor provision to your 401(k) plan or set up a new Safe Harbor 401(k).

A Safe Harbor is a great option if you’ve failed nondiscrimination testing in the past or if you’re concerned about potentially failing these tests. If participants are making elective deferrals you’ll be matching, you’ll need to let them know.

October 15: If you’re a C Corp, Sole Proprietorship, or Corporation LLC with a tax extension, file now.

You can now file your extended Form 5500, Form 8955-SSA if you were granted a Form 5558 extension. Make all employer contributions and you’ll receive a tax deduction for the 2021 tax year.

November 1: Plan ahead for required December 1 notices.

While not a hard deadline, it’s recommended that employers begin planning and let their plan administrators know if they’d like to change the type of safe harbor plan they have or if they’re planning to add a safe harbor provision for the following calendar year.

November 15: Send Q3 statements to participants.

Let plan participants know how their balance is doing in the third quarter.

December 1: Issue Safe Harbor plan notices.

Whether your Safe Harbor is old or new, you’ll have to send notice 30 to 90 days before the first of the year

December 15: If you received an extension, distribute the Summary Annual Report now.

If you received a Form 5558 extension, you’ll need to send the SAR to all eligible employees

December 31: Catch up on anything you may have missed.

The end of the calendar year is a day of reckoning for correcting failed ACP/ADP tests. If you want a plan in 2023, now is a great opportunity, as elective deferrals cannot be retroactive. Current year RMDs must go out. It’s your last chance to convert your 401(k) into a Safe Harbor.

Any other discretionary changes affecting the 2022 plan year must be signed. Fee disclosures required under 404(a)(5) must be distributed as well.

The 401(k) contribution deadlines for an employer’s plan sponsor can be confusing because the deadlines for your 401(k) plan’s 2022 year won’t arrive until well into 2023. This is great news, as the calendar allows for more time to make contributions and ensure compliance. Working with small business 401(k) provider Ubiquity, you can rest easy, knowing we’re tracking all these key dates for you and communicating well in advance so you can focus on the future.

Contact us to learn more about changing providers or setting up a new 401(k) plan for your small business. We offer easy setup and affordable flat fees!


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San Francisco, CA 94104
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© 2023 Ubiquity Retirement + Savings
Privacy Policy
Do not sell my info
44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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