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.

A Comprehensive Guide for Small Business Owners

Offering a small business 401(k) retirement plan is a vital part of attracting top-notch employees and enhancing the financial security of your workforce. But this benefit comes with its own set of regulatory obligations. This article aims to demystify the essentials of 401(k) plan compliance, providing a clear roadmap to avoid legal pitfalls and create a solid retirement savings vehicle for your employees.

Understanding 401(k) Plan Compliance in Depth

401(k) plan compliance is about more than just ticking off boxes; it’s about abiding by the laws and guidelines laid down by the Internal Revenue Service (IRS) and the Department of Labor (DOL). These agencies collaborate to ensure that 401(k) plans are administered equitably and within legal parameters.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

Consequences of Non-Compliance

Failing to comply with regulations can be a costly misstep. Consequences range from monetary fines and penalties to plan disqualification, which could be devastating for your employees and damage your business reputation. Should you find compliance daunting, you might consider options like a Safe Harbor 401(k), which offers some relief from non-discrimination testing, thus simplifying compliance.

Key Strategies for 401(k) Compliance Management

Here are actionable steps to stay ahead of 401(k) compliance requirements:

Plan Documentation and Effective Communication

Think of your plan documents as the constitution of your small business 401(k) plan. They should meticulously outline plan features, eligibility criteria, contribution limits, investment choices, and vesting schedules. Keep these documents up-to-date, and ensure they align with both your operational procedures and regulatory changes.

Communicate Clearly and Often

Regular, straightforward communication with your employees is a must. Utilize various channels, such as emails, webinars, or even in-house workshops, to distribute plan summaries, changes, and educational resources. This not only keeps your workforce informed but also fosters greater engagement with the retirement plan.

Contributions and Annual Nondiscrimination Testing

Keep a close eye on IRS-set contribution limits, which are subject to change. For the year 2023, the employee contribution limit is $22,500, with an additional catch-up contribution provision for employees aged 50 or older. These limits change annually and are generally announced in late October or early November.

Non-discrimination testing for 401(k) plans is a set of annual tests required by the IRS to ensure that a company’s retirement plan does not unfairly favor highly compensated employees (HCEs) over non-highly compensated employees (NHCEs). These tests evaluate contributions, benefits, and the utilization of the plan’s features to make sure they are proportionately equitable across different employee income levels. Failing these tests may require corrective actions such as refunding contributions to HCEs or making additional contributions to NHCEs. The aim is to create a fair retirement plan that benefits all employees, not just those at the higher end of the pay scale.

Vesting and Defined Employee Eligibility

Eligibility criteria may include factors like age and length of service. Establish these thresholds carefully, balancing between inclusivity and administrative ease. Your plan’s vesting schedule should also align with your workforce retention strategies. Whether you opt for immediate or graded vesting, make sure it’s clearly communicated and easy for employees to understand.

Investment Options

Having a wide array of investment options is more than a nice-to-have; it’s a necessity. Your selections should accommodate different risk tolerances and investment philosophies. Keep an eye out for any underperforming options and consider periodic realignments.

Cost Considerations

Partner with a 401(k) plan provider who offers transparent, low-fee options. Remember, fees — especially percentage-based fees — erode earnings over time, impacting the retirement savings of both your employees and your business. Look for providers (like Ubiquity) that offer flat fees. Flat fees don’t increase when your balance grows, so you can save thousands over the life of your account.

Fiduciary Responsibilities: More Than Just a Formality

As the plan sponsor, you are legally obligated to act in your employees’ best interests. This includes prudent management of investments and ensuring the plan operates efficiently. Given the complexities involved, hiring a third-party advisor or consultant with specialized expertise can be invaluable.

Your Takeaway

Offering a 401(k) plan as a small business owner is both a substantial benefit to your employees and a significant responsibility. Navigating the maze of compliance requirements might seem daunting, but understanding these elements can go a long way in safeguarding your plan and avoiding unnecessary legal hassles. Always stay current with regulatory changes and consider professional consultation to ensure you’re managing your retirement plan as effectively as possible.


Please refer to Important Information for details.

Overwhelmed by the thought of setting up a 401(k) plan for your small business? You’re not alone. In this guide, we’ll break down the essential questions you need to ask your retirement plan provider to make the process easier—and ensure a secure financial future for both you and your employees.

1. What Type of 401(k) Plan is Best for My Business?

Before you get lost in the details, understand there are several types of 401(k) plan available. These include traditional 401(k)s, Safe Harbor 401(k)s, and sole proprietor 401(k)s.

  • Example: A small tech startup may find that a Safe Harbor 401(k) is a better fit due to easier compliance tests, allowing them to focus more on growth.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

2. What are the Costs Involved?

Initiating a 401(k) as part of your retirement plan setup is a pivotal step towards a secure financial future. Know that retirement plans aren’t one-size-fits-all, especially when it comes to costs. Alongside administrative fees, investment management fees, and employee education expenses, you’ll find different pricing models. Flat fee plans can be particularly advantageous for small business owners, as they provide predictable costs that are easier to budget for. By asking targeted questions during the setup process, you’ll ensure your plan is customized to meet your business needs, compliant with legal requirements, and provides your employees with valuable benefits. Don’t delay in securing both your and your employees’ financial futures—reach out to a qualified retirement plan provider today.

  • Call to Action: Make sure you get a full breakdown of these costs upfront to avoid unexpected financial surprises down the line.

3. How Can I Maximize Tax Benefits?

You can save money on taxes with a 401(k). Talk to your provider about tax credits, deductions, and employer contributions that can benefit both you and your employees.

  • Call to Action: Consult your tax advisor to explore all the tax-saving opportunities available to you.

4. What Administrative Responsibilities Will I Have?

Even though a provider handles most of the grunt work, you’re not entirely off the hook. You’ll still need to manage:

  • Employee communication
  • Plan monitoring
  • Compliance

5. How Can Employees Enroll and Manage Their Accounts?

Enrollment should be hassle-free for your employees. Find out about the enrollment process, what account management tools are available, and if there are educational resources to help your staff make wise investment choices.

6. What Compliance Measures Should I Be Aware Of?

Stay on the right side of the law by ensuring compliance with IRS regulations. Here’s what to keep an eye on:

  • Nondiscrimination testing
  • Timely filing of required forms

7. Can I Customize the Plan to Fit My Business Needs?

Your business is unique, and your 401(k) should reflect that. Discuss tailoring features, contribution limits, and eligibility criteria to suit your specific needs.

8. How Often Will the Plan be Reviewed and Updated?

Good retirement planning is ongoing. Find out how often your provider will assess the plan’s performance and make necessary adjustments.

9. What Employee Education and Support Will be Provided?

An educated employee is an empowered one. Ask what educational resources—like workshops, online tools, or one-on-one consultations—are available.

Your Takeaway

Initiating a 401(k) as part of your retirement plan setup is a pivotal step towards a secure financial future. By asking these targeted questions during the setup process, you’ll ensure that your plan is not only customized to meet your business needs but also compliant with legal requirements. In turn, this will provide your employees with valuable benefits. Don’t delay in securing both your and your employees’ financial futures—reach out to a qualified retirement plan provider 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.

More Than Just Paperwork, It’s a Pathway to Peace of Mind and Employee Satisfaction

Numbers like 5500 and 1099 aren’t secret codes, although mastering them can sometimes feel akin to cracking an enigma. For the passionate and hardworking small business owner, the labyrinthine world of 401(k) forms and deadlines can seem overwhelming. However, by understanding these forms and timelines, not only do you ensure compliance, but you also offer your employees and yourself two incredible psychological benefits: peace of mind and a greater sense of security.

Understanding Forms: Simplifying the Paperwork

1. Plan Document

Think of the plan document as your retirement plan’s blueprint. It outlines all the rules and provisions, acting as the foundational guide for your small business 401(k) plan. Knowing this document like the back of your hand ensures you’re informed about your rights and responsibilities, helping you to avoid legal pitfalls and granting you, and your employees, peace of mind.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

2. Form 5500

This annual report is not merely administrative red tape; it’s a statement of transparency and credibility. It communicates important financial information and ensures compliance with government regulations. If this sounds daunting, partnering with a financial advisor or your plan provider can make this task less intimidating. This collaboration can free up your mental space, allowing you to focus on your business and contribute to your own emotional well-being.

3. IRS Form 1099-R

For any distributions made from your employees’ retirement accounts, IRS Form 1099-R is the go-to document. Accurate reporting is critical here. The benefit of handling this form carefully is that you reinforce the sense of security among your employees, affirming that their financial futures are in competent hands.

Deadlines: Time is of the Essence

1. Plan Establishment

The journey to retirement preparedness starts with a single step: setting up the 401(k) plan. As a small business owner, establishing the plan before the end of your fiscal year will make you eligible for that year’s tax deductions, while simultaneously boosting employee morale and trust.

2. Form 5500 Filing

The deadline usually falls on the last day of the seventh month after the plan year ends, often landing on July 31st. Extensions are available, but timely filing avoids penalties and sends a strong message of responsibility and reliability to your team.

3. Employer Contributions

Not only are employer contributions tax-deductible, but they also act as a powerful tool to motivate and retain talent. Meeting the contribution deadlines as specified in your plan document enhances your reputation as a reliable employer, which could lead to increased loyalty and job satisfaction among your staff.

4. Employee Notifications

Keeping your employees informed about their 401(k) options is crucial. Transparent communication about enrollment deadlines, investment options, and contribution limits builds trust and encourages active participation, leading to a happier and more engaged workforce.

5. IRS Compliance Testing

Compliance testing ensures your plan is equitable for all employees. A Safe Harbor provision guarantees compliance, further cementing the belief among your employees that they are in a fair and secure retirement plan.

Encouraging Employee Participation

1. Automatic Enrollment

By facilitating an easy entry into the retirement plan, you eliminate barriers that might discourage participation. It’s a simple way to encourage long-term thinking, which enhances your employees’ overall life satisfaction.

2. Matching Contributions

Contributions become a lot more appealing when they’re essentially “free money.” Matching contributions act as an immediate financial reward and could increase employees’ emotional investment in both their futures and their work.

3. Education and Seminars

Informed employees are engaged employees. Offering informative and engaging seminars not only educates your team but also helps them understand the breadth and depth of their options, empowering them to make choices that best suit their individual needs.

Owning a small business is a journey filled with challenges, and navigating the 401(k) landscape is no exception. However, by mastering this realm, you not only ensure legal compliance but also bring invaluable peace of mind and a heightened sense of security to your employees — and let’s not forget, to yourself as well. After all, a well-prepared future is a collective endeavor, and we’re here to support you every step of the way on this essential journey.


Please refer to Important Information for details.

In the dynamic and often unpredictable realm of freelancing and gig economy work, financial stability might seem like an elusive dream. However, it’s crucial for gig workers to acknowledge that they are essentially small business owners. Therefore, planning for financial security, especially in retirement, becomes a matter of great importance.

If you’re a gig worker wondering how to secure your financial future, you’ve come to the right place. Let’s delve into the comprehensive benefits of a small business 401(k) plan and how to go about setting one up.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

The Comprehensive Benefits of a Small Business 401(k) Plan for Gig Workers

  1. Retirement Savings for Long-term Stability: Traditional 9-to-5 jobs often come with the perk of employer-sponsored retirement plans, but gig workers typically don’t have that luxury. Opting for a small business 401(k) plan is a proactive step towards building a financial cushion for your golden years. You can put aside a portion of your earnings from each gig to grow over time.
  2. Tax Advantages to Maximize Your Income: A small business 401(k) isn’t just about saving; it’s also about savvy tax planning. Contributions to a traditional 401(k) plan are pre-tax, lowering your overall taxable income. This means not only are you saving for a comfortable future, but you’re also reducing your current tax liability, thereby retaining more of your hard-earned money.
  3. Solo 401(k) for Maximizing Contributions: The freelance nature of gig work means you are both the boss and the employee. This unique position allows you to take advantage of a Solo 401(k) plan. A Solo 401(k) permits contributions both as an employer and an employee, giving you the opportunity to maximize your retirement savings.
  4. Consistent Saving Despite Income Fluctuations: The variable nature of gig work can make it difficult to save regularly. A small business 401(k) plan instills a discipline of long-term savings. You can set it up so that a percentage of each payment from your gigs goes directly into your 401(k), ensuring that your retirement savings grow regardless of any fluctuations in your income.
  5. Diverse Investment Opportunities: A robust 401(k) plan offers more than just a savings account; it offers a gateway into various investment options. Depending on your plan provider, you could diversify your retirement funds across a mix of mutual funds, index funds, bonds, and other financial instruments, potentially optimizing your returns over time.

Setting Up Your Small Business 401(k) Plan: A Step-by-Step Guide

  1. Choosing the Ideal Plan Provider: The first step in setting up a 401(k) plan is choosing a provider who understands the unique challenges and needs of gig workers and small businesses. Look for providers with excellent reviews who offer Solo 401(k) options and compare their features to align with your personal and financial goals.
  2. Understanding the Fine Print on Contribution Limits: The IRS sets limits on how much you can contribute to your 401(k). For 2023, you can contribute up to $22,500 as an employee or up to $30,000 if you’re 50 or older. Moreover, as an employer, you can chip in up to 25% of your net self-employment income, with the combined total not exceeding $66,000.
  3. Consulting Financial Experts for Tailored Advice: If retirement planning seems like a daunting maze, don’t hesitate to seek professional financial advice. A seasoned financial advisor can help you understand your investment options, navigate the tax implications, and tailor a retirement strategy that best fits your long-term financial goals.
  4. Regularly Review and Revise Your Plan: Don’t ‘set it and forget it.’ Make it a habit to regularly review your contributions, track the performance of your investment portfolio, and make necessary adjustments. This proactive engagement with your 401(k) is vital for optimizing its growth potential.

Ubiquity Plans for Gig Workers

If you’re a gig worker, you are essentially in the business of “You Inc.,” so planning for retirement is not just an option but a necessity. A small business 401(k) plan offers a multi-faceted approach to building long-term financial security, offering benefits from tax savings to diversified investments. Take control of your financial future today by exploring our 401(k) options tailored for the unique needs and opportunities of gig work.

A solo(k) plan offers an ideal retirement savings solution for gig workers. Ubiquity offers two solo(k) plans: the straightforward Single(k)® and the more advanced record-kept Single(k) Plus®. Both are designed to meet the unique needs of self-employed individuals who want to maximize their retirement savings.

  • The Ubiquity Single(k)® plan is perfect for those who want a simple, easy-to-manage retirement account with high contribution limits and the option for employer matching. It can offer you the flexibility and control you need for long-term financial security.
  • The Single(k) Plus® offers record-keeping features, allowing you to shrug off that paperwork and more easily meet IRS compliance requirements.

Either option provides the chance to save up to three times more annually than you could with a traditional IRA. Moreover, you’ll have the autonomy to decide how much you want to contribute each year, giving you more control over your financial future. These features make Ubiquity’s Single(k) plans a compelling choice for gig workers looking to build a substantial nest egg for retirement.


Please refer to Important Information for details.

Sole proprietor. Solopreneur. Entrepreneur. The labels may differ, but the essence remains the same: you are a small business owner, a self-reliant individual pursuing a passion while managing multiple responsibilities. Among the myriad of tasks demanding your attention, planning for retirement might often get pushed to the background.

However, preparing for your financial future is more than just a prudent decision; it’s a necessity. Here’s why it’s essential for solopreneurs like yourself to leverage small business retirement plans, such as Solo 401(k), to ensure that your golden years are financially secure.

What is a Solo 401(k)?

Solo 401(k) plans, designed specifically for small business owners with no employees other than themselves and possibly a spouse, offer a gateway to future financial stability. They afford the same tax credits and loan options as traditional 401(k) plans offered by larger employers. One of the most alluring features (though there are many) of a solo 401(k) is that it combines the high savings potential of a traditional 401(k) with tailored benefits for solopreneurs.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

Benefits of a Sole Proprietor 401(k) Plan

1. Tax Advantages and Savings
  • The Solo 401(k) plans and other small business retirement plans offer a wealth of tax benefits, particularly for solopreneurs.
  • The ability to deduct contributions from taxable income can lower your overall tax liability, making it an efficient strategy for wealth preservation.
  • Saving pre-tax income in a retirement plan can lead to significant long-term gains, all while reaping immediate tax advantages.
2. Wealth Accumulation Through Compound Interest
  • Retirement plans enable the accumulation of wealth through compound interest, a powerful tool for growth. Compound interest is every saver’s best friend.
  • Regular contributions, even small ones, can lead to significant growth over the years, especially if started early in one’s career.
  • Time plays a vital role in this process, allowing investments to grow and compound, creating a snowball effect that magnifies financial gains.
3. Flexibility and Control
  • Small business owners benefit from greater control over their retirement savings, customizing it to suit their unique requirements.
  • Options like the Solo 401(k) offer a diverse array of investment choices, empowering you to align your portfolio with your specific risk tolerance and preferences.
  • You have the autonomy to define contribution limits and make adjustments based on the evolving needs of your business and personal finances.
4. Attracting and Retaining Talent
  • As your business grows and you begin to hire, offering a retirement plan can be a competitive advantage in attracting and retaining quality employees.
  • Retirement benefits often rank high among employee considerations, and by extending this offer, you signal your dedication to their long-term well-being.
  • This not only fosters loyalty but can also become a magnet for highly skilled professionals.
5. Building Retirement Assets Separately from Business
  • Establishing retirement assets distinct from your business assets is a wise move to mitigate risks tied to entrepreneurship.
  • Diversifying your investments ensures that your retirement nest egg remains unaffected by unforeseen business challenges or downturns.
  • This separation acts as a financial safety net, adding an extra layer of security to your future.

Building Bridges to a Secure Future

As a solopreneur, planning for retirement may seem like a distant concern, but it is an indispensable step towards securing a stable financial future. By investing in a small business retirement plan, like a small business 401(k), you not only set yourself up for a peaceful retirement but also unlock numerous benefits, including tax advantages, compound growth, customization, and potential talent attraction.

In the dynamic world of entrepreneurship, where uncertainty often rules, a well-thought-out retirement plan serves as a robust anchor. Your future self, enjoying the fruits of today’s wise decisions, will undoubtedly thank you.

Safe Harbor 401(k)s are a popular choice for small business owners who are looking to reward employees with higher retirement contributions, while also maximizing their own retirement funds. With mandatory employer contributions, Safe Harbor 401(k) plans exempt employers from the hassle of certain annual IRS auditing and most nondiscrimination testing. Below are our tips on how to get the most out of Safe Harbor retirement plans.

Safe Harbor 401(k) Quick Facts

  • Employees can contribute up to $22,500 of their annual salary, which can reduce their taxable income.
  • The maximum combined employer/employee contribution limit for 2023 is up to $66,000.
  • Employees age 50 and older can put in an extra $7,500 in catch-up contributions on top of the maximum limits.
  • Taxes are due when employees take the money out at retirement as early as 55 years of age.
  • Employers must contribute at least 3% of each employee’s salary or match up to 4% of contributions.
  • All employer contributions are immediately 100% vested.

How to Save the Most for Your Retirement As a Small Business Owner

There are several reasons Safe Harbor plans are excellent small business retirement plans, allowing company owners to save more for retirement:

  • No annual nondiscrimination testing: Administrative costs include statement mailing, completing IRS Form 5500, approving loans and distributions, and plan participant support. These costs can range from $750 to $3,000 a year, but tend to be on the higher side if annual nondiscrimination testing is required, too. Unlike most 401(k) administrators, Ubiquity does not charge AUM or per-person fees.
  • No corrective refunds: In a traditional 401(k), the average amount business owners and highly compensated employees contribute to the plan generally cannot exceed 2% higher than the average amount regular employees contribute.

If the 401(k) plan has low enrollment or modest participation, those with the means to fund their retirement would be unable to do so. By agreeing to contribute at least 3% to all staff members, you maximize the freedom to fund your retirement to the limit and generously reward key employees as well.

  • Lower tax burden: Contributions made to your own plan lower your personal taxable income for the year. Contributions made to your employees lower your taxable business income for the year.
  • Higher profitability: According to T. Rowe Price, companies with great 401(k) plans have 20-80% higher profits than companies with poor 401(k)s. The research suggests that well-compensated employees are more satisfied and productive. Lower turnover means lower training costs, which allows you to save more money for retirement and reinvest more into the business.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

What Safe Harbor 401(k) Formulas Are Available?

With a 3% nonelective contribution, employers simply fund each employee’s plan to the tune of 3% of the employee’s annual salary up to the maximum employer/employee limit, regardless of what the employee contributes.

Other options for a Safe Harbor 401(k) employer matching formula include:

  • Basic: A 100% match on the first 3% of employee contributions and 50% match on the next 3-5%.
  • Enhanced: A 100% match on the first 4-6% of employee contributions.

As a small business employer, any of these match formulas will satisfy the Safe Harbor requirements and allow you to contribute up to $61,000 to your own retirement fund, acting as both “employee” and “employer.”

Considering the Transition to a Safe Harbor 401(k)?

Whether you’re starting a brand-new Safe Harbor or converting an existing small business 401(k) by adding an amendment, Ubiquity can help. Our small business focus and flexible plans allow us to serve our clients at a lower cost without AUM or per-enrollee fees, which means your plan can grow without penalty. Contact us for details.


Please refer to Important Information for details.

As a small business owner, you wear multiple hats and juggle numerous responsibilities. While focusing on the growth and success of your business, it’s important not to neglect your own future, or that of your employees.

Part of that comes from understanding what your employees need from their small business 401(k) and where they expect to be when they retire. Offering a Roth 401(k) as part of your business’s retirement plan can be a great way to help them (and you) secure a prosperous and comfortable future.

What is a Roth 401(k)?

A Roth 401(k) is a retirement plan that allows you to make after-tax contributions. Unlike a traditional 401(k), Roth contributions aren’t put into savings pre-tax, but they offer tax free withdrawals. And that’s not the only perk — here are the upsides of offering a Roth to your small business 401(k) plan participants.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

Advantages of a Roth 401(k) for Small Business Owners

  • Tax-Free Growth: Roth contributions grow tax-free, meaning you won’t owe any taxes on the earnings, dividends, or capital gains within your Roth account. This can result in significant savings over time.
  • Tax Diversification: By having both traditional and Roth contributions, you create tax diversification in your retirement portfolio. This flexibility can help you better manage your tax liability in retirement.
  • Lower Taxes in Retirement: By having tax-free withdrawals from your Roth account, you can potentially lower your overall tax burden in retirement when combined with other sources of income.
  • Estate Planning Benefits: Roth accounts can be passed on to your beneficiaries tax-free, providing a valuable inheritance while offering potential tax advantages for your loved ones.
  • More Competitive Hiring (and Better Retention): We’ve said it before, and we’ll say it again: Offering a comprehensive benefits package – including a 401(k) – makes your small business more attractive to potential employees. By offering a Roth and traditional 401(k) option, you show employees you care about their financial wellbeing, which leads to a more loyal and invested workforce.

Considerations of a Roth 401(k) for Small Business Owners

  • Future Tax Rates: If you believe that tax rates will increase in the future, Roth contributions can be a strategic move. By paying taxes now on your contributions, you can potentially avoid higher taxes during retirement.
  • Investment Horizon: Consider your investment horizon when deciding on the Roth option. The longer your investments have to grow, the more advantageous tax-free withdrawals become, due to compound interest.

How to Implement a Roth 401(k)

  • Communicate with Your Plan Provider: Engage in open discussions with your retirement plan provider to understand the feasibility and process of adding a Roth option to your 401(k) plan.
  • Employee Education: Providing educational resources and communicating the benefits of Roth contributions to your employees will help increase plan participation. Encourage them to consider their individual tax situations and retirement goals.
  • Seek Professional Advice: Consult with a financial advisor or retirement plan specialist to evaluate your specific circumstances and determine the best strategy for your retirement planning.

In the world of small business ownership, planning for your retirement may sometimes take a backseat. However, by embracing the Roth option in your 401(k) plan, you can enjoy tax-free growth, flexibility, and potential tax advantages in retirement.

The key is to consider your long-term goals, tax expectations, and seek professional advice to make an informed decision. By taking this step today, you are investing in a brighter future for your business, your employees, and yourself.


Please refer to Important Information for details.

As a small business owner, planning for retirement might not be at the top of your to-do list – after all, running a business is a full-time job! However, it’s essential to consider your financial future and ensure you have a comfortable retirement. One of the most effective retirement planning tools available to sole proprietors is the 401(k) plan.

Benefits of a 401(k) for Sole Proprietors

Tax Advantages

  • A 401(k) allows you to contribute pre-tax dollars, reducing your current taxable income. This means you can potentially save on your tax bill while building your retirement savings.

Retirement Savings

  • With a 401(k), you can systematically save for your future. By contributing a portion of your income regularly, you’ll be better prepared to meet your financial goals.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

Employer Contributions

Flexibility in Contribution Limits

  • 401(k) plans offer higher contribution limits compared to other retirement accounts. As a sole proprietor, this means you can save more for retirement each year, maximizing your savings potential.

Potential for Increased Employee Recruitment and Retention

  • If you decide to expand your business and hire employees, offering a 401(k) plan can be a powerful tool to attract and retain top talent. It demonstrates your commitment to their long-term financial wellbeing.

Considerations for Sole Proprietors:

Start Early

  • Time is your biggest ally when it comes to retirement savings.Because of compound interest, the sooner you start contributing to a 401(k), the more time your money has to grow. Don’t delay; begin building your retirement savings today!

Understand Contribution Limits

  • It’s crucial to be aware of the annual contribution limits set by the IRS. For 2023, the maximum employee contribution is $22,500, with an additional catch-up contribution of $7,500 if you’re 50 years or older. Employer contributions are generally capped at 25% of compensation or 20% for sole proprietors.

Consider a Solo 401(k)

  • As a sole proprietor, you may qualify for a Solo 401(k), also known as an Individual 401(k). This type of plan is designed specifically for self-employed individuals and offers higher contribution limits and flexibility compared to other retirement plans.

Seek Professional Guidance

  • Navigating the complexities of retirement planning and choosing the right 401(k) plan can be overwhelming. Consider consulting a retirement plan provider or financial advisor who specializes in small business retirement solutions. They can help you understand the options available and tailor a plan to your specific needs.

Pros and Cons of 401(k)s for Sole Proprietors:


1. Tax Advantages

By contributing to a 401(k), you can take advantage of tax savings. Your contributions are made with pre-tax dollars, reducing your taxable income for the current year.

2. Retirement Savings

A 401(k) plan provides a structured and disciplined approach to saving for retirement. By contributing regularly, you’re taking proactive steps towards securing your financial future.

3. Flexibility in Contribution Limits

401(k) plans offer higher contribution limits compared to other retirement accounts. As a sole proprietor, this flexibility allows you to save more for retirement each year. The ability to contribute larger amounts can help accelerate your retirement savings and ensure you’re on track to meet your financial goals.


1. Administrative Burden

Being a sole proprietor comes with various responsibilities, and managing a 401(k) plan adds to the administrative tasks. You’ll need to stay updated on compliance regulations, track contributions, and ensure timely reporting. Consider working with a plan provider who can help handle those responsibilities for you.

2. Cost

While the long-term benefits of a 401(k) plan can outweigh the costs, it’s essential to consider the associated expenses. Look for a 401(k) plan with low, flat fees and a high customer satisfaction rating. (It’s us, hi.)

3. Limited Access to Funds

One drawback of a 401(k) plan is that withdrawals before the age of 59 ½ are generally subject to penalties and taxes. If you anticipate needing access to your funds before retirement, you may want to explore other options or consider setting aside emergency savings separately.

By weighing the pros and cons, you can make an informed decision about whether a 401(k) plan is suitable for your business. Remember to consider your long-term goals, financial situation, and capacity to handle the administrative requirements.

For small business owners, offering a retirement plan can be particularly advantageous. One significant benefit is the ability to attract and retain skilled employees. In competitive job markets, job seekers often consider not only their salary but also the overall benefits package offered by potential employers. A well-structured retirement plan can serve as a valuable incentive for prospective employees, making your business more appealing compared to others without such benefits. Likewise, existing employees are more likely to remain loyal to a company that invests in their future and offers a retirement plan, fostering a sense of security and commitment.

Moreover, in some states or regions, offering a retirement plan may be mandatory for businesses above a certain size or revenue threshold. Government regulations and labor laws may require employers to participate in state-run retirement programs or offer their retirement plans to employees. By complying with these regulations, small business owners can avoid legal issues and potential penalties while providing a valuable financial safety net for their workers.

Several states have already implemented retirement mandate deadlines to encourage small businesses to provide retirement benefits. As a retirement plan provider, it’s essential to stay updated on these deadlines to ensure compliance and support your clients effectively. Following are the deadlines to be aware of for 2023:


  • Deadline: July 31st for businesses with 1–3 employees.
  • The OregonSaves program requires employers to facilitate retirement savings for their employees.
  • Deadlines are determined by the number of employees. The more employees you have, the earlier deadlines will be.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.


  • Deadline: August 31, 2023
  • Businesses with 5 or more employees must offer a retirement plan or provide access to MyCTSavings.
  • Employers have the flexibility to choose between sponsoring their plan or offering a payroll deduction IRA.


  • Deadline: November 1, 2023
  • Employers with 5–15 or more employees must offer a retirement plan or enroll in the Illinois Secure Choice Savings Program.
  • The program allows employees to contribute a portion of their paycheck to an individual retirement account (IRA).

Own a small business? Here’s how to prepare for your upcoming state deadline.

Plan ahead

  • Stay informed about retirement mandate deadlines in your state.
  • Allocate resources and time to implement a retirement plan or enroll in a state-sponsored program.

Seek guidance from professionals

  • Consult a retirement plan provider to understand the requirements and options available.
  • They can guide you through the process, help choose the right plan, and ensure compliance with regulations.

Educate your employees

  • Communicate the benefits of retirement plans to your employees.
  • Provide resources and educational materials to encourage participation and empower your workforce to make informed decisions.

Assess the financial impact

  • Evaluate the financial implications of offering a retirement plan or participating in a state-sponsored program.
  • Consider tax incentives, cost-sharing options, and long-term benefits to make an informed decision.

The Benefits of a Ubiquity Small Business 401(k)

You may think, “Well, a state-sponsored plan might be the path of least resistance,” but there are several reasons a Ubiquity small business 401(k) might be a better solution for your business:

  1. Ubiquity 401(k) complies with your state mandate requirements, no guesswork required.
  2. It also saves more in personal and business taxes, while lowering your taxable income.
  3. Our plug-n-play payroll integration saves time and stress.
  4. Low, flat fees are your friend.
  5. As a private solution, a small business 401(k) plan through Ubiquity isn’t tied to the state (so it offers better protection of your assets).

As a small business owner, complying with retirement mandate deadlines is crucial not only for legal reasons but also for attracting and retaining top talent. By offering retirement benefits, you demonstrate your commitment to your employees’ financial security and wellbeing.

Stay proactive, seek professional guidance, and engage your workforce to ensure a smooth transition towards a secure future–no matter when your state’s deadline is.

(& How to Set Yourself Up for Success)

Retirement planning is critical to securing a comfortable and financially stable future. However, market volatility can significantly affect the path to a successful retirement. So how do you contingency plan to retire during a tough market?

Step one: Take a deep breath, and start saving ASAP. Remember: Time in the market is more important than timing the market.

Understanding Market Volatility and Retirement

First, a crash course in market volatility. Economic indicators, geopolitical events, investor sentiment, and corporate performance all influence financial markets. Market volatility arises when these factors cause significant fluctuations in asset prices, leading to increased risk.

Uncertainty in the market impacts retirement planning in several ways. It can cause a significant decline in investment portfolios, meaning retirees relying on their investments may face reduced savings. Market downturns also diminish the returns on investments, potentially jeopardizing long-term goals. We highly recommend taking steps to recession-proof your small business 401(k).

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

Challenges Faced by Retirees in Volatile Markets

One of the primary concerns is the sequence of returns risk. This risk refers to the order in which investment returns are realized. When retirees begin their retirement, a decline in the market can have a negative impact.

This is because they are forced to sell their assets at lower prices in order to cover their living expenses. This negative effect can last for a significant period of time. Check out these 4 tips for managing your 401(k) during a recession.

Strategies for Retirement Planning in the Face of Market Volatility

1. Diversification and Asset Allocation

Diversification involves spreading investments across different asset classes, such as stocks, bonds, and real estate, to reduce risk. Asset allocation determines the ideal mix of these asset classes based on individual risk tolerance and goals.

2. Long-Term Investment Approach

Retirement planning should adopt a long-term perspective, focusing on the overall goals and objectives rather than short-term market fluctuations. Everyone can benefit from the potential growth of their savings over time by staying invested for the long haul.

3. Seek Professional Financial Advice

Advisors can help you and your small business’s employees understand their risk tolerance, develop appropriate investment strategies, and make informed decisions to preserve and grow their retirement savings.

4. Regular Portfolio Reviews

Periodic adjustments may be necessary to rebalance the portfolio and maintain an appropriate asset allocation.

Mitigating the Impact of Market Volatility on Retirement Savings

Beyond investment strategies, there are additional measures you can take to help mitigate the impact of market volatility on your retirement savings:

1. Emergency Fund

Having readily available cash can help cover unexpected expenses without the need to tap into retirement savings.

2. Insurance Coverage

Having adequate insurance coverage, including health, life, and long-term care insurance, can protect retirees from unexpected medical expenses and provide a safety net during turbulent times.

3. Contingency Planning

Developing contingency plans can help retirees prepare for unexpected events. This can involve identifying alternative income sources or adjusting retirement expenses if necessary.

Adapting Retirement Plans in Times of Market Turmoil

1. Flexibility in Withdrawal Strategies

Adjust your withdrawal strategies to align with market conditions. By adopting a flexible approach, you can withdraw less during downturns so you keep the maximum amount in your 401(k) earning compound interest.

2. Adjusting Retirement Timeline

Delaying retirement by a few years can provide additional time to accumulate savings and ride out market fluctuations.

3. Exploring Alternative Income Sources

During volatile markets, retirees can explore alternative income sources to supplement their retirement savings. This can include rental income, income-generating hobbies, Social Security and more.

The Importance of Regularly Reviewing Retirement Plans

Lastly, it’s crucial for retirees to regularly review and update their retirement plans to adapt to changing circumstances. Factors such as risk tolerance, goals, and financial situations may change over time. Key considerations for regular plan reviews include:

1. Reassessing Risk Tolerance

As retirement progresses, risk tolerance may evolve. It’s important to reevaluate and adjust the investment portfolio to align with changing risk preferences.

2. Updating Goals and Objectives

Retirement goals and objectives may shift due to life events or changes in circumstances. Regular reviews ensure that retirement plans remain relevant and aligned with evolving needs.

3. Adjusting Investment Strategies

Market volatility may warrant adjustments to investment strategies. Consult with a financial advisor to evaluate whether asset allocation or investment vehicle changes are necessary.



Ubiquity is not a registered investment advisor, and the information provided herein should not be considered legal or tax advice. We recommend consulting with your financial planner, attorney, and/or tax advisor for personalized advice. 

Read Ubiquity's Guide to Small Business 401(k) Plans
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Talk to Sales
Schedule a Free Consultation

Contact Support
Visit our Help Center
6am–5pm PT / 9am–8pm ET

© 2024 Ubiquity Retirement + Savings
44 Montgomery Street, Suite 300
San Francisco, CA 94104