Ubiquity Retirement + Savings Logo

Author: Siân Killingsworth

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.

It’s never too early to start planning for retirement. If you’re not sure how much money you need to save to retire comfortably, a 401(k) calculator can help you figure out how much money you need to put away every month.

With just a few clicks, this tool can estimate how long it will take for your retirement account to grow into something substantial—and can even recommend tactics that may help boost your savings rate through lifestyle changes like cutting down on spending or earning more income.

What is a 401(k) Calculator?

A 401(k) calculator is a tool that allows you to estimate how much money you’ll have in your retirement savings account based on the amount of money that you contribute, as well as other variables.

It’s important to note that the results from these calculators are only estimates and shouldn’t be relied upon as a guarantee of future returns or performance.

How to use a 401K Calculator

To use a 401K calculator, you need to know how much you have already saved and how much you are able to put away each month. Next, estimate how much money will be needed for your retirement and then see if you can afford to save as much as possible each month.

In addition to these basic steps, there are also other questions that should be asked when using a 401K calculator:

Retirement Questions

  • How long do you plan on working?

The more time between now and retirement, the more time there is for compound interest (the process by which investments grow at an accelerating rate) to work in your favor.

  • How long do you expect your retirement to last?

Many people wish to retire early, but with life expectancy increasing, it’s important to remember to account for additional years in which you will need funding.

If your plan limits the amount you can contribute to retirement savings each year, such as with an IRA, you may want to ask your employer to switch to a 401(k) plan. A 401(k) plan allows participants to contribute three times as much each year toward retirement as an IRA.

  • What are your retirement goals?

Write them down and make sure they include the lifestyle you want to live in retirement.

Financial Questions

  • What kind of investment options does your plan offer?

Some plans offer several types of investments; others have fewer options, and some have none at all. If your plan offers a variety of investing instruments, so much the better. A good plan will feature stocks, bonds, ETFs, and more. Most plans will offer ready-to-go retirement plans that have been designed by an investment professional, and some will offer the option for you to choose your own investments.

  • How much income will you need each month during retirement?

This will help determine how much money you’ll need to save in order to meet those goals.

  • What are your current savings/investment accounts worth?

Also consider how much interest they earn, as well as any other assets that may be available to use toward reaching your goals.

The IRS updates the amount you’re permitted to contribute to your retirement annually. Make sure you know what the maximum is so you can save as much as possible.

It’s never too late to start planning for your future. Try the Ubiquity 401(k) retirement calculator now!


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.

It’s not always easy to figure out how much money you need to save for retirement. When your employer withholds money from your paychecks for federal and state taxes plus Social Security and Medicare, it can be difficult to know how much you can afford to put away for your future. And you may be hesitant to take money out of your paycheck that you may need for normal expenses like your mortgage or rent, food, childcare, etc.

That’s why we recommend using a paycheck calculator. It takes the guesswork out of figuring out how much you should be saving each month, and it helps put your exact income into context.

What is a paycheck calculator?

A paycheck calculator is an online, easy-to-use tool that helps you figure out how much money will be in your paycheck after various deductions, including retirement contributions. The tool will take several pieces of personal information into account:

  • Your current salary
  • The frequency at which you are paid (weekly, bi-monthly, etc.)
  • Tax filing status (married, single, etc.)
  • Other income sources such as earned interest
  • Federal and state taxes
  • Other deductions, such as health or dental insurance expense
  • Current retirement contribution
  • Proposed new retirement contribution

Why use a paycheck calculator?

A paycheck calculator is a tool that helps you understand your finances better so you can make informed decisions about your financial future. It identifies how much money will be in your paycheck after taxes and all other deductions.

It gives an accurate picture of what’s happening with your income and spending, which helps prevent nasty surprises when it comes time for an emergency or some other major expense. And finally, it can help you stay on top of planning for your retirement.

How much money do you need to save for retirement?

This totally depends on your retirement goals, your income, your savings, and the lifestyle you wish to have in retirement. Most employers do not offer pensions, and Social Security is dwindling, so your best course of action is to maximize your own retirement savings while you can.

Your annual 401(k) contribution is subject to maximum limits established by the IRS. For 2023, the maximum contribution for this type of plan is $22,500 per year for individuals under 50 and $30,000 for individuals 50 or older. Employer contributions do not count toward the IRS annual contribution limit, which is good news for those whose employers make these contributions.

Try Ubiquity’s Paycheck Calculator to see how increasing your 401(k) contribution will affect your paycheck amount – and your financial future. It will save you time and stress in the long run by eliminating guesswork.


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.


Employer matching contributions are a common feature of many company 401(k) plans, with 98% of employers adding partial or full matching bonuses. The typical American company is matching 6% of employee contributions in 2023.

Employers are also increasingly recognizing the 401(k) employer match as a powerful incentive to encourage loyalty to the company; in 2022, 59% have vesting schedules ranging from one to six years before employees are entitled to walk away with the full amount of employer-matched funds.

If you own a small business or work for one, keeping tabs on what other companies are matching on their 401(k)s can help you gauge how competitive your own plan is and better adjust your contributions for the year.

Partial 401(k) Matches in 2023

In a partial match plan, the employer matches a smaller percentage of what employees contribute. A common partial match is 50 cents for every dollar of employee contribution, up to 6% of the employee’s salary. Even if employees opt to put in a greater amount – say 8% – the employer is still only responsible for putting in up to 6% in that case. So, for instance, a person earning $100,000 a year might contribute $6,000 and receive another $3,000 in partially matched funds.

Full 401(k) Matches in 2023

Full 401(k) matching means employers put in dollar-for-dollar what employees contribute, up to a set default rate or the IRS maximum. While 3% was the norm at one time, 65% of plans are now using a default rate higher than 3% in order to significantly boost savings for participants over time. In 2023, the most common default rate is now 6% of pay, according to the Plan Council Sponsor of America.

2023 Safe Harbor Matching Formulas

Safe Harbors are a popular type of 401(k) plan that allows businesses to bypass many of the annual IRS nondiscrimination testing requirements when they agree to a standard matching formula. Any employer contributions made in a Safe Harbor plan must be fully vested for all employees.

The most common Safe Harbor 401(k) matching formulas are:

  • 100% match on the first 3% of employee contributions, plus 50% match on the next 3-5% (Basic match)
  • 100% match on the first 4-6% of employee contributions (Enhanced match)
  • At least 3% of employee pay, regardless of employee deferrals (Nonelective contribution)

401(k) Contribution Limits in 2023

Employees can put up to 100% of their compensation into a 401(k), up to the maximum limit. This year:

  • Employees can contribute up to $22,500 (up $2,000 from 2022)
  • Employees age 50 and older can add an additional $7,500 on top of this amount (up $1,000 from 2022)
  • Employers can add $43,500 to their own 401(k), bringing the total balance up to $66,000 in 2022 (up $5,000 from 2021)

SIMPLE 401(k) Limits in 2023

Employers offering a SIMPLE 401(k) allow employees to save up to $15,000 in 2023, which is up by $500 from 2022. Those age 50 and older may contribute another $5,000 for a total of $19,000.

Employers can contribute dollar-for-dollar up to 3% of a worker’s pay or contribute a flat 2% of compensation regardless of the employee’s own contributions.

Employer 401(k) contributions are subject to an employee compensation cap of $330,000 for 2023.

Engage Employees and Encourage Them to Save With a 401(k) Match This Year

The employer match is an excellent incentive tool to encourage employees to participate in your small business 401(k) plan. Matching not only helps employees create better financial security, but allows you and higher-paid executives the opportunity to max out your retirement savings as well.

Ubiquity is a leading provider of 401(k) plans geared specifically to small businesses. We are happy to help you set up an easy and affordable small business retirement plan with matching and educate your workforce so they understand what a great and valuable benefit you’re offering. Contact us to learn more.

Small business employers and employees with a 401(k) plan can save more in 2023 in more ways than one:

Increased Savings Opportunity: The IRS has increased annual contribution limits to help you can more. You may want to consider adjusting your paycheck deduction in accordance with the increased limit and to an amount that works for you.

Smart Savings Strategy: Ubiquity plans have defaults to include bonus pay in employee contributions because the bonus is included in compensation on W2 forms. Employers may make alternate arrangements in writing with employees who choose other options. Employees can also change their deduction online for a specific payroll.

Lower Your Taxes: Any money you contribute to a 401(k) has taxes deferred until withdrawal in retirement, so your taxable income is reduced by the amount you contribute to your 401(k)!

A small business 401(k) is the ideal way to generate considerable wealth for retirement using investment returns and compounding interest. The wise use of pre-tax dollars can ease your 2023 income tax burden as well.

How to save more for retirement with a 401(k) in 2023

The IRS 401(k) savings limit increased $2,000 in 2023 to $22,500. The catch-up contribution for those age 50 and over will increase by $1,000 in 2023, letting those who qualify add another $7,500 in savings. It’s important to note that 401(k) plan contributions can be made with pre-tax dollars, so the more you contribute, the lower your annual taxable income. Even $1,000 contributed can be enough to lower your tax bracket and the percentage of your income paid to the IRS.

Employers have the option to add a discretionary contribution of up to $43,500 to an employee’s account. Also, if you are a small business owner with a Solo 401(k), you’re able to contribute to your plan as both employee and employer – to a maximum amount of $66,000 in 2023. Your spouse may join the plan, potentially bringing your household maximum to $132,000. The $7,500 catch up contribution (for individuals age 50 or older) is allowed in addition to these maximum limits.

IRA limits are also increasing for 2023. The new maximum for savers age 49 and younger is $6,500. Those age 50 and older can put away an additional $1,000. Using a 401(k) instead of an IRA can help you save more and combat any inflation.

How much should I set aside to max out my 401(k) in 2023?

Investors under age 50 who are on a biweekly pay schedule will need to save approximately $845 per paycheck to reach the $22,500 retirement plan contribution limit in 2023.

Anyone 50 or older looking to capitalize on the catch-up bonus will need to save approximately $1,153 per paycheck.

What strategies do people use to maximize retirement savings?

There are numerous strategies that may help you save more for retirement in 2023, such as:

  • Consider setting up an automatic deduction from your paycheck directly into your retirement account, so the savings happen without you even having to think about it.
  • Set up an automatic transfer of profit shares and bonuses into your 401(k) through paycheck deduction
  • Examine your monthly spending carefully and create a budget that helps you pay down any credit card debt so you can escape those pesky interest rates
  • Cancel unnecessary or unused membership subscriptions
  • Use shopping apps to take advantage of sales and promotions to save money on costs that have been hit by inflation (hello, $8 carton of eggs)

How can I change my 401(k) deferral elections in 2023?

Employees can log in to their Ubiquity account at any time modify their deferral election. Sponsors will receive notification or check their employer dashboard to review the respective updates so they can relay those changes to the payroll provider.

As a provider and administrator, Ubiquity offers 401(k) plans geared toward small businesses. Contact us to learn more about maximizing your 401(k) savings this year.

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

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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.

Start the New Year With a 401(k)

Siân Killingsworth / 15 Dec 2022 / 401(k) Resources

Group of friends enjoying out with sparklers. Young men and women enjoying new years eve with fireworks.

Start the New Year off right by launching a retirement plan for your small business to help you and your employees meet savings goals for your golden years. A 401(k) can help you attract and retain employees in the coming year and starting a plan on January 1 has numerous benefits.

Here’s why ringing in 2023 with a 401(k) makes so much sense:

401(k) plan contribution limits are going up

Every year, 401(k) contribution limits tend to rise with inflation. After a year of record-setting inflation, we’re poised for a record-setting 401(k) limit increase as well. For 2023, individuals can set aside $2,000 more in personal retirement savings (up to $22,500); this is up from $20,500 in 2022.

As a small business owner in 2023, you can contribute to your own account as both employee ($22,500) and employer ($43,500) to save a total of $66,000.

If you’re over 50, you can submit a $7,500 catch-up contribution—up $1,000 since 2022—on top of the $66,000 maximum, bringing the grand total to $73,500.

With a traditional account, that means you can deduct up to $73,500 off your taxable income for the year. If you’re making contributions on behalf of your employees, you can deduct those amounts off your business tax liability for the year as well.

Another option—if you think you’ll be in a higher tax bracket after you retire—is to pay your taxes up front with a Roth account and pull tax-free money out in retirement.

You have more time than you think

December 31st used to be the deadline for businesses to adopt a new 401(k) plan, but the SECURE Act has brought about positive changes and generous extensions. Now you have until March 15th, 2023 to adopt a traditional 401(k) plan for 2022 if you’re taxed as a Partnership or S-Corp or until April 15th, 2023 if you’re taxed as a Sole Proprietorship or C-Corp. If you file an extension, you can have until September or even October to adopt a plan and invest for the previous year. The caveat to this is, when opening a 401(k) plan for 2022, while in 2023, you are only allowed to contribute discretionary Profit Sharing however this could get you up to $61,000 in employer contributions that can be deducted on your 2022 taxes.

You also have until December 31st, 2023, to convert a traditional 401(k) plan into a 4% nonelective Safe Harbor plan dating back to the 2022 plan year. This comes in handy if your plan fails nondiscrimination testing for 2022 and you want to avoid corrective refunds.

Additionally, if you start a plan in 2023 without Safe Harbor and decide that you would like to add it in the middle of the 2023 plan year, you can! You have up until December 1st, 2023, to add a 3% nonelective Safe Harbor for the full 2023 plan year allowing you to maximize your employee contributions without worrying about certain non-discrimination tests.

Kicking off a new 401(k) plan in January solves that problem

There is one silver lining to a late setup. While your employees may be unable to make all these salary deferrals for 2022, you can still have more time to decide whether to make a year-end profit-sharing contribution without worrying how you’ll pass IRS nondiscrimination testing.

That said, there is some administrative work to tackle, so it’s best to start sooner rather than later.

To set up a small business 401(k) in 2023, you’ll need to decide whether to assume full responsibility for the 401(k) in-house or work with an experienced plan provider who can help set up and maintain the plan. Most small businesses choose the latter.

You’ll need to decide on matters like:

  • 401(k) plan types
  • Eligibility requirements
  • Vesting schedules
  • Business contributions
  • Loan administration
  • Nondiscrimination testing
  • Investment decisions

On average, it takes 30-45 days to get a new 401(k) rolling, so there’s no time like the present to get started. Amid the Great Resignation, offering a 401(k) in 2023 is more important than ever; 84% of employers believe1 offering financial wellness tools like 401(k)s increases employee retention. Given that just 58% of small businesses offer 401(k) benefits2, it’s still a differentiating factor in attracting talent.

Interested in 401(k)s for your small business? Contact Ubiquity to learn more.


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.

1 Bank of America, 12th Annual Workplace Benefits Report, “Navigating a New Era of Financial Wellness,” 2022.

2. https://www.prnewswire.com/news-releases/survey-small-business-owners-still-resistant-to-starting-a-401k-plan-only-one-in-four-currently-offer-as-an-employee-benefit-301544021.html

What’s the secret to successful 401(k) investing? For many people, a 401(k) retirement account is their largest asset, perhaps worth more than their home. Successful 401(k) investment can mean the difference between a comfortable retirement or a struggle once you stop working.

The types of 401(k) plans for small businesses and sole proprietors don’t differ much from the plans for larger companies in the way they work. The latter is just more complex. Individual, solo, and self-employed 401(k) plans for small businesses and sole proprietors are very similar. In a self-directed 401(k) plan, employees choose where to invest their money rather than rely on the employer to decide where to invest these funds.

Want to know how to best manage your small business retirement plan? Here are six 401(k) secrets you need to know:


1. Take Advantage of 401(k) Matching 

One of the major advantages of 401(k)s is that many companies offer employees a match. This is free money and an ideal way to save. Typically, companies match up to 6 percent of employee contributions. Some employers use a very generous matching formula while others choose not to match employee contributions at all. Note that not all contributions to your employees’ retirement plan are due to matching. Specific terms of a 401(k) retirement plan can vary. The plan document will contain details on how your company’s 401(k) works.


2. Contribute Up to the Limit 

Contribute as much as you can to your 401(k) each year. For 2023, those younger than 50 can contribute up to $22,500. Those age 50 or older can put in an additional $7,500 in catch-up contributions. Maxing out your contributions can play a huge role in the quality of your retirement. Review all the 2023 limits here.


3. Diversify, Diversify, Diversify 

It’s impossible to overstate the importance of diversification when it comes to your 401(k). Spreading risk is the basis of successful investing, and that certainly includes your 401(k). A mix of stock and bond funds, rebalanced regularly to reflect your risk tolerance as you get closer to retirement, is the easiest way to diversify.

The federal government takes investment fiduciary responsibilities very seriously. Businesses are subject to Department of Labor (DOL) audits and investigations to verify that their retirement plans offer responsible investment options with reasonable fees. If they don’t, the business can face stiff penalties, as well as litigation from any employees who are paying excessive fees or have too few investment options that adequately match their risk-tolerance profile.

For all these reasons, more businesses are choosing retirement plans with 3(38) investment fiduciary services, such as a Ubiquity Censibly Yours plan in order to access a greater variety of investment options.


4. Vesting Incentivizes Employees to Stay 

It’s in the best interest of employees to remain employed for at least as long as it takes to become fully vested in their 401(k). Otherwise, they lose all or most of the match from their employer. Employers have the ability to choose the rate of vesting, and many select a one-, two-, or up to six-year employment requirement for vesting eligibility.


5. Don’t Touch Your 401(k) Until Retirement 

Yes, emergencies happen. When circumstances are dire, you may have no choice but to tap your 401(k) to pay expenses. However, doing so is always a last resort as it could significantly affect your retirement.

While it’s possible to take out 401(k) loans, you’ll incur fees and penalties if you fail to repay. On the other hand, if you take a hardship distribution in the event of a financial emergency, it is not a loan, so you cannot put the money back into your 401(k) later.

If you cash in your 401(k) prior to retiring, expect to pay taxes. The money is not tax-deferred. If you take withdrawals prior to reaching age 59.5, you may get hit with a 10% early withdrawal penalty as well as paying income taxes.

Some people plan to keep working well into their retirement years to make up for their lack of retirement planning and saving. However, working longer may not be an option. Many current retirees say they had to retire earlier than they planned because of health problems or unforeseen changes within the company they were working for. Taking steps today to prepare for what you want to happen in the future will leave you better prepared to handle surprises along the way.


6. Think Long-Term 

A 401(k) isn’t a short-term investment and shouldn’t be treated that way. Develop a long-term investment strategy with the help of a financial advisor and review your portfolio annually, if not quarterly. Chasing the hot stock or sector of the moment isn’t usually an effective strategy. Attempting to time the market is a great way to lose money, while staying the course and sticking to your goals is a smart way to avoid emotion-driven, impulsive decisions that may derail your retirement.

Customized 401(k) plans for small businesses do more than help you and your employees save for retirement. These plans help you attract and keep employees. For more information and to schedule a free consultation, contact Ubiquity.


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.


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.



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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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