Your Complete Guide to Getting Started
Saving in a 401k is one of the best ways to achieve your retirement planning goals. Whether you own your business or are employed by someone else, you can learn about 401k here, putting you on the right track for a financially secure future.
Get started saving now so you will have the freedom to choose how you want to live when you retire. Since 1999, our mission at Ubiquity Retirement + Savings™ has been to make it easy for small business owners to design and execute a cost-effective 401k saving strategy. Here is our guide to what you need to know about 401k.
A 401k must pass certain nondiscrimination tests each year that are designed to prevent the 401k from primarily benefiting high-earning individuals. If a 401k fails these tests, an option for the small business owner is to adopt a Safe Harbor 401(k) plan. A Safe Harbor 401k can bypass the tests in exchange for specified employer contributions that are fully vested. When an employer chooses a Safe Harbor 401k, the owners and high-earning individuals will be able to maximize their 401k contributions instead of being limited by the amount lower-paid employees contribute to the 401k.
“Ubiquity's customer service has been spectacular, and their ability to work with my team to educate them on the importance of retirement savings surpasses any other provider I've used. The team is amazing and their pricing and products are better than all the other providers I compared them against.”
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401k plan guide
No confusing language or too much financial jargon. Just a clear, concise, simple explanation.
Download Ubiquity’s Guide to Small Business 401k Planning and learn how a 401k can help lower your taxable income at a low fee and help you and your employees achieve greater financial security.
Tax laws require 401k plans to pass nondiscrimination tests each year to make certain the 401k is not primarily benefiting high-earning individuals within the company. The IRS wants to ensure that plans that are being established within an organization are fair and balanced, hence the name, “nondiscrimination” testing. If lower-paid individuals are not making significant contributions, high-earners and business owners may not be able to maximize their contributions ($18,500 for 2018, $24,500 if age 50 or older).
“I find Ubiquity quite easy to work with. Being a small business, it is so nice to be able to call and receive help over the phone. Tony is very personable and knowledgeable. ”
When individuals stop working for the business sponsoring the 401k, they typically have four options regarding their 401k savings. They can choose to leave their savings in that 401k, roll over (move) their money to another 401k, roll over their money to an IRA, or take a cash distribution of their savings.
If an individual dissolves their 401k and takes the cash, it’s counted as income that year and taxed because the contributions were not taxed when deposited into the 401k. You will be taxed for the contribution and all the interest earned unless your 401k was set up as a Roth, or after-tax plan. Many individuals choose to roll their 401k money directly into an IRA or into a 401k offered by their new employer. Expert advice: Look at the investment choices available to you and the fees associated with the plan or IRA before making any moves.
In saving for retirement, tax laws are designed to discourage savers from taking money out of a 401k before they retire. Money can only be taken out of a 401k after certain events occur such as leaving employment, disability, and retirement. Many 401k plans allow individuals to take a withdrawal before retirement if they are experiencing a financial hardship. Distributions took before an individual reaches retirement age may be subject to early distribution taxes as well as income taxes.
“I am a new plan sponsor for my employer with Ubiquity. The friendliness of customer support was outstanding. So far, I am very impressed with Ubiquity! ”
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Setting up a 401k can be complicated.
Only Ubiquity gives small business owners access to 401k experts in addition to industry leading low flat-fees. Each sales expert has over a decade of experience assisting business owners in 401k plan design. Take advantage of this free benefit.
“I have never…..I mean NEVER worked with a better Customer Service Crew before and my background is Customer Service! They are all fantastic. Love, Love, Love Catherine, Doug and the rest of the crew!”
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