Category: Personal Finance

Find important information on Personal Finance from the experts at Ubiquity Retirement & Savings. Get important news that can affect your personal finances, along with tips and advice from our team of financial experts. Call Ubiquity today for a Free Consultation at 855.466.5825.

To help your small business employees save for their futures, consider adding automatic enrollment to your 401(k) plan. This is an effective method of encouraging them to save. This is a strategy worth considering for a variety of reasons. Not only does it motivate employees to save for retirement, but it also is advantageous to your small business. Here are six reasons why offering automatic enrollment is advantageous:

1. Compliance with Future Requirements

Automatic enrollment is expected to become a mandatory feature in most plans starting in 2025. Implement automatic enrollment now. This will put you ahead of the curve. Ensure that your small business is prepared to meet future regulatory requirements. It demonstrates your commitment to compliance and positions your business favorably.

2. Tax Savings Opportunities

When you incorporate automatic enrollment into your small business 401(k) plan, you may qualify for tax savings of up to $500 per year for the first three years of offering it. These savings can help offset plan costs and provide financial relief for your business.

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

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.

3. Increased Plan Participation

Remove the decision-making burden from your employees. Make it easy for them to save for retirement with automatic enrollment. This will significantly increase plan participation rates. Studies have shown that streamlining your 401(k) plan with features like automatic enrollment can lead to participation rates surpassing 90%. This high level of engagement ensures more of your employees are actively saving for their retirement.

4. Improved Retirement Savings

By automatically enrolling employees in the plan and setting a default contribution rate, you create a pathway for improved retirement savings. This effortless enrollment approach increases the likelihood that employees will save for retirement. In fact, research indicates that employees who are automatically enrolled in a plan tend to contribute at higher rates compared to those who enroll voluntarily.

5. Attracting and Retaining Top Talent

Offering a retirement plan with automatic enrollment sends a strong message to your employees that you genuinely care about their financial future. This becomes a compelling selling point when attracting new talent and retaining your current workforce. Retirement benefits are becoming more important than just salary. Automatic enrollment sets your business apart and makes it easier for employees to save for the future. This will help you attract and retain existing and potential employees.

6. Streamlined Administration

By automatically enrolling employees, you reduce the need for extensive efforts to encourage participation in your small business’s 401(k) plan. Additionally, setting a default contribution rate simplifies plan administration, reducing administrative burden and freeing up time for other essential tasks.

Embrace automatic enrollment to help your employees save for retirement. This will also improve the competitiveness, compliance, and administrative efficiency of your small business. It’s a proactive approach that benefits both your employees and your business’s long-term success.



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. 

It’s no secret that attracting and retaining top talent is crucial for the success of any small business. While offering competitive salaries is the baseline for keeping employees and prospective new hires happy, providing financial planning resources to employees is becoming more important than ever.

There are several ways to provide financial planning resources to employees. Some of the most popular methods include:

1. A small business 401(k) plan.

A 401(k) plan is a retirement savings plan that allows employees to contribute a portion of their income to a tax-advantaged investment account. To that end, a small business 401(k) plan is the same thing, but tailored to employers and employees at a small business.

Employers can also contribute to the plan on behalf of their employees. Offering a 401(k) plan is a valuable employee benefit–and a great way to help your employees save for retirement.

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

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. Health insurance plan options.

Health insurance is the single-most desired benefit employees want, and for significant financial reasons. Participation in a health insurance plan lifts a massive financial burden from individuals seeking medical attention for anything from serious illness to a sprained finger.

3. Health savings accounts (HSAs).

HSAs are tax-advantaged savings accounts that employees can use to pay for qualified medical expenses. HSAs are typically offered in conjunction with high-deductible health insurance plans and can help employees save money on healthcare expenses, while also encouraging them to be more engaged in their healthcare decisions.

4. Workplace life and disability insurance plans

The opportunity to participate in these types of insurance is highly valued by employees of all stripes. At typically very little cost to the employers, you can offer your employees peace of mind that they and their beneficiaries will be covered after an adverse event.

5. Financial education resources.

From improving financial literacy to making better financial decisions, financial wellness programs can include workshops, online resources, and one-on-one counseling sessions with financial advisors.


There are three easy steps to start implementing these financial wellness benefits at your company.

1. Understand your employees’ needs and preferences.

Conducting surveys or focus groups can help you identify what types of resources your employees are most interested in and their financial goals and challenges. It’s important to choose resources that are affordable, easy to use and provide value to your employees.

2. Optimize communication with employees.

Ensure your employees understand the benefits of the resources you offer and how to access them. Provide regular updates and encourage feedback to ensure the resources meet your employees’ needs.

3. Provide ongoing support and education.

Financial planning is an ongoing process, and supporting your employees is important. This can include regular workshops, one-on-one counseling sessions, or access to online resources, such as the Ubiquity blog, which is full of relevant articles designed to help savers increase their financial literacy.


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.

As a small business owner, you may not be intimately familiar with the details of your 401(k) plan. That’s pretty normal, but it’s important to know what your options are, how they can help you save on taxes, and even potentially help you grow your business.

It’s smart to review your plan document annually, but more frequently if your business changes throughout the year. For example, if your business expands significantly, or if you hire a new employee who will be working part-time instead of full-time, you should revisit your eligibility and contribution requirements. You may also want to start or update employer contributions to employees’ accounts.

Why is Regularly Reviewing and Updating Your 401(k) Plan Important?

  • Changes in business size can necessitate changes to your plan. When you start out as a one-person shop, it makes sense for your retirement savings account to be a solo 401(k) plan such as a Ubiquity Single(k)®. But as your company grows and hires more employees, you may find that you need to upgrade to a plan that covers all your employees, such as a Ubiquity Custom(k)®. To ensure that your plan passes most mandatory IRS testing, consider adding a Safe Harbor provision to your existing 401(k) plan. This enables your company to actually bypass certain compliance tests because you’re required to make minimum contributions to all employees at a pre-approved rate to ensure all employees are being treated fairly.
  • Regulations change. Keeping up with these changes is crucial if you want to avoid penalties or fines from the government. And don’t forget that sometimes these changes are to your benefit! For example, annual contribution limits rise, meaning that you and your employees can all put more money in your 401(k)s each year. For 2023, anyone under age 50 can save up to $22,500, and those age 50 and older can save up to $30,000.
  • Improve your own retirement readiness. By regularly reviewing and updating your 401(k) plan, you’ll be able to ensure that you and all of your employees are saving for retirement on schedule. Are you taking advantage of all the tax savings opportunities your plan provides? Are you maxing out your contributions to your own retirement?
  • Increase employee satisfaction. Employees who feel valued by their employers are more likely to stay with them longer than those who don’t feel valued, which means regular reviews and updated benefits could help keep turnover low.
  • Improve employee participation. The more employees participate in their own 401(k)s, the better set up they will be in the future.

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

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.

How to Review Your 401(k) Plan

There are several steps you can take to help your employees get the most out of their retirement plans.

First and foremost, review the plan documents for accuracy and completeness. Make sure that all information in the document and with your provider are is current and accurate, including:

  • Name and address of your company.
  • Designated plan sponsor, trustee(s), and financial advisor, if applicable.
  • Designated investment options available within the plan.

The plan should:

  • Cover the appropriate employees.
  • Provide employees required disclosures.
  • Deposit employee deferrals on time.
  • Make employer contributions on time.
  • Follow the terms of the plan document.
  • Limit employee deferrals and employer contributions to the proper maximum limits.

Reviewing your small business 401(k) plan doesn’t just mean looking at it and then forgetting about it again. It means making sure that any necessary updates are made as soon as possible so that no one gets left out or misses out on benefits they could otherwise receive from participating in the program – including you.


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.

So you’ve gotten a 401(k) plan set up for your small business. Now what? After taking the time to set up an effective plan for your employees, you need them to start using it! However, many employees aren’t motivated to contribute more (or sometimes at all) to their 401(k)s, which can be detrimental to both you and them.

These strategies will help you – and your employees – make the most of the benefits your small business offers.

Educate Your Employees About the Benefits of 401(k) Plan

First, ensure your employees understand the benefits of contributing to a 401(k) plan. Educating our employees about the benefits of the 401(k) plan, such as tax advantages and any matching contributions, is essential. Be sure to let them know how much they’ll save on taxes by contributing more to their 401(k) plans, and make it clear that their contributions are an investment in their future.

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

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.

Offer an Employer Match

Want to benefit your employees (and make your small business stand out)? The easiest way to do that is by offering an employer match as part of your 401(k) plan. What this means is that you’ll make contributions to the employee’s 401(k) plan based on the amount the employee contributes. For example, if an employee contributes 3% of their salary to the 401(k) plan, you could match that contribution.

Not only will this make your employees feel more valued, it’ll also motivate them to contribute more to their 401(k)s.

Make the Enrollment Process Easy

The enrollment process for a 401(k) plan should be simple and straightforward. Make sure your employees understand how to enroll in the plan and how to make contributions. If the process is complicated, your employees may be discouraged from enrolling or contributing.

Offer Automatic Enrollment

Automatic enrollment is a great way to motivate employees to contribute more to their 401(k) plan. With automatic enrollment, you enroll your employees in the plan and set a default contribution amount. The employee can opt out of the plan, but most employees will remain enrolled. This can be a great way to increase participation in the plan.

Offer Financial Education

Offering financial education to your employees can help them understand the benefits of a 401(k) plan and how to manage their finances. Consider offering financial education seminars or one-on-one counseling sessions. The Ubiquity blog is a great online resource for timely, relevant retirement plan information and more.

Communicate Regularly

Communication is key, and this is no exception. Regularly update your employees on the benefits of your small business’s 401(k) plan, its performance, and how to enroll. Keep them informed about any changes to the plan or employer contributions.

Celebrate Success

When your employees contribute more to their 401(k) plan, celebrate their success (and we don’t just mean with a pizza party). Offering incentives for reaching certain savings milestones can also motivate your employees to continue to contribute more to their 401(k) plan.


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.

If you’ve taken the time to set up a 401(k) for your small business’s employees, chances are you’re probably hoping they’ll enroll. After all, low participation rates can lead to a lack of retirement savings for your employees, as well as limiting the benefits that you can receive from offering a 401(k) plan. So how do you make enrollment happen? There are several ways that small business owners can encourage high participation rates in their 401(k) plans.

1. Consider the factors that impact participation rates…

Several factors can affect small business 401(k) plan participation rates, including plan complexity, high fees, limited investment options, and more. Lack of automatic enrollment and no employer match can also be a turn-off when it comes to employee participation.

2. …And then solve for them.

Show your employees you can give them the 401(k) plan they need. Choose a retirement plan that enables employees to save for retirement easily, the flexibility to make changes when necessary, and the educational resources they need to improve their financial literacy.

3. Make sure they understand the upside of a 401(k) plan.

A small business 401(k) plan greatly benefits all participants. After all, it allows them to save for retirement while potentially reducing their current tax liability. Employees can contribute up to $22,500 (or $30,000 if they are age 50 or older) in 2023 to their 401(k) plan–and you can make contributions on their behalf, too.

Bonus: You benefit, too. Offering a 401(k) plan helps attract and retain talented employees. And even better, your contributions are tax-deductible, too.

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

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.

4. Simplify plan design.

Simplifying the plan design can make it easier for employees to understand and enroll in the plan. This can include providing clear explanations of plan provisions, clarifying investment options, offering automatic enrollment and auto-escalation, and more.

5. Increase employee communication.

You must communicate the benefits of the plan clearly and frequently to your employees for it to work. This includes explaining how the plan works, what the benefits are, and how to enroll. We like to use a variety of methods so everyone gets the information: email, newsletters, and meetings all work.

6. Offer employer matching contributions.

Implementing an employer match into your small business’s 401(k) offering can be a powerful incentive for employees to participate in the plan. You can choose to match a percentage of your employees’ contributions or make a fixed contribution.

7. Implement automatic enrollment.

This easy step can remove the barriers to entry that employees may face when trying to enroll in the plan. With automatic enrollment, employees are automatically enrolled in the plan unless they choose to opt out.

Thanks to Secure 2.0 legislation, most plans established by December 29, 2022 will be required to add automatic enrollment no later than January 1, 2025, so you might as well get ahead of the curve.

8. Provide financial education to encourage saving.

Encouraging employees to save by helping them understand the benefits of saving for retirement and how to manage their finances effectively. You can assist by offering education on 401(k) planning and encouraging your employees to increase their contributions–helping them achieve their goals and showing that you value their futures.

9. Offer incentives.

Prizes and recognition can be great ways to encourage participation in your small business’s 401(k) plan. Secure 2.0 legislation permits de minimis financial incentives, not paid for with plan assets, such as low-dollar gift cards, to boost employee participation in workplace retirement plans. You can incentivize things like enrollment, increasing contributions, reaching savings goals and more.

Need some help getting your employees to participate? Reach out to Ubiquity today at 866.634.6116.


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.


When it comes to retirement savings, 401(k) plans are a popular option for small business owners. From tax savings to employee retention, there are plenty of benefits to offering a plan to your employees.

However, managing a 401(k) plan can be tricky, and small mistakes can have big consequences. So we’re breaking down the most common slip-ups small business owners make when it comes to 401(k) implementation and management… and how you can avoid making them.

Mistake #1: Not Offering a 401(k) Plan

Right out of the gate, failing to offer a 401(k) plan can make it difficult to attract and retain talented employees, which can hurt your business’s bottom line. It can be relatively inexpensive to implement a 401(k) plan, and doing so will automatically make your small business able to offer a benefits package that can compete with the big guys. It’ll also give your small business tax benefits and enable you to contribute to your own retirement.

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

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.

Mistake #2: Choosing the Wrong Plan Provider

Not all plan providers are created equal! Choosing the right plan provider is essential for small business owners who want to set up a 401(k) plan. Make sure you’re picking a plan with low fees, transparent pricing, and experience working with small businesses. (Allow us to reintroduce ourselves.)

Mistake #3: Failing to Monitor Plan Fees

One of the most significant mistakes that small business owners make with their 401(k) plans is failing to monitor the fees. If your plan is too expensive, or has hidden fees, or is just plain wrong for your employees, they won’t want to participate. Ubiquity offers transparent pricing and low, flat fees1 to keep your business’s 401(k) plan affordable and easy for you and your employees.

Mistake #4: Not Diversifying Investments (or Offering too Many)

Investing too heavily in a single stock or asset class can be risky, and it can lead to significant losses if that investment performs poorly. On the flip side, offering too many can lead to analysis paralysis. If you can, work with your plan provider to ensure your plan offers sufficiently diverse investment options that your employees can pick from based on their risk tolerance and other factors.

Mistake #5: Neglecting Compliance Requirements

401(k) plans are subject to various compliance requirements, including annual testing to ensure the plan is not discriminating against certain employees. As a small business owner, it’s your responsibility to work with your plan provider to make sure you meet all of your plan’s compliance requirements. Failure to do so could result in significant penalties and legal consequences.

And don’t forget about some legal details that work in your favor — such as updated contribution limits. These increase annually with inflation and set the maximum contribution that individuals are permitted to make. In 2023, you can save up to $22,500 (or $30,000 if you are age 50 or older). Find out all the details on contribution limits here. High earner? Learn about that here.

Mistake #6: Not Reviewing and Updating the Plan Regularly

Make sure your 401(k) is FOMO-free. Regularly review and update your 401(k) plan to ensure it’s still meeting the needs of your business and employees. This includes updating the plan’s provisions, adjusting contribution limits, or upgrading your plan when your business grows. If you don’t, you could miss opportunities for savings and investments.

Mistake #7: Not Matching Employee Contributions

Want to incentivize your employees to use your small business’s 401(k) plan? An employer match is probably right for you. By matching your employees’ contributions, you encourage them to save for retirement. It also makes it easier for you to keep and retain top talent, minimizing time and resources needed to backfill roles.

Mistake #8: Not Communicating Effectively with Employees

Clear communication is vitally important in many things in life—and managing a 401(k) plan is no exception. Be sure you’re taking the time to educate your employees about your small business’s 401(k) plan offerings, including its benefits, investment options, and contribution limits.

We also recommend offering company meetings to review plan provisions, providing online resources, or working with financial advisors to provide one-on-one advice. This will help ensure your employees are using the plan to its full potential (and making informed decisions about their retirement savings.)


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.

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.

As a small business owner, offering a 401(k) plan to your employees is a great way to attract and retain talent. However, simply having a 401(k) plan isn’t enough to win the loyalty of employees and the attention of prospective new hires.

In order to truly benefit your employees, you need to make sure that the plan is user-friendly. We’re breaking down our top tips for making your small business 401(k) plan easy to understand.

Provide clear and concise information about the plan.

It makes sense that one of the biggest barriers to participation in a 401(k) plan is a lack of understanding. Make sure that your employees have clear and concise information about the plan, including:

  • What a 401(k) plan is.
  • How your small business 401(k) plan works.
  • What the investment options are.
  • What the fees and expenses are.
  • How to enroll in the plan.
  • How to start contributing and make changes to contributions.
  • How to access their account.

This information should be provided in a way that is easily accessible. You may want to consider adding resources such as a dedicated 401(k) information section on your company website or intranet.

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

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.

Offer investment education.

Investing can be overwhelming, especially for those who are new to it. Offer investment education to your employees to help them make informed decisions about their 401(k) contributions. This could include:

  • Holding informational sessions or webinars on investing.
  • Providing educational materials such as books or online resources. (Hint: the Ubiquity blog is a great resource!)
  • Offering consultations with a financial advisor or plan representative.
  • Creating a list of recommended investment options based on different risk tolerances and goals.

Remember: Employees who feel confident in their own knowledge about investing are more likely to participate in the plan.

Simplify the investment options.

Help your employees avoid decision paralysis by paring down the investment options your small business 401(k) offers. This will make it easier for your employees to make informed investment decisions, and help them feel more confident doing so.

Consider offering a limited number of investment options, specifically including pre-packaged portfolios that allow your employees to quickly and easily click into saving for retirement.

Automate enrollment and contributions.

You heard it here first: Automatic enrollment is awesome. By automating these employee contributions, you’re making it easier for your employees to participate in your 401(k) plan. Automatic enrollment will be mandatory for most plans in 2025 anyway, so get ahead of the curve now.

You can also offer automatic contribution increases, also known as auto-escalation. This is when the employees’ contribution rate increases annually. This can help employees save more for retirement without having to think about it.

Regularly review and update the plan.

A 401(k) plan is not a set-it-and-forget-it benefit for you or your employees. Regularly review and update the plan to ensure that it remains user-friendly and relevant to your employees’ needs. This could include:

  • Reviewing the investment options and updating them as needed.
  • Evaluating the fees and expenses (or switching to a provider with low, flat fees – like Ubiquity).
  • Gathering feedback from employees and making changes based on their suggestions.
  • Keeping up-to-date with regulatory changes and ensuring compliance with all applicable laws and regulations.

By regularly reviewing and updating the plan, you can ensure that it remains a valuable benefit to your employees–and to your small business.


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.

Contact your plan sponsor right away if you think you have contributed too much to your 401(k) or you’ll be taxed twice (in the year you contributed, and in the year you withdrew)! If you’re under 59.5 years old, your distributions could also be subject to the 10% early distribution tax and 20% withholding.

Can you contribute too much to a 401(k)?

The IRS limits the amount you can put into a tax-advantaged 401(k) account. For 2023, that amount is $22,500 for individuals under 50 and $30,000 for those age 50 and older. The employer contributions do not count toward that limit but instead count toward an overall limit of 100% of your salary or $66,000 whichever is less.

Most plan participants never have to worry about over-contributing. The plan administrator tasked with account maintenance will likely keep you from putting too much money into the account each year.

However, you might run into a problem of over-contributing if:

  • You switch jobs during the year and start a new 401(k) plan.
  • You work multiple jobs with more than one 401(k).
  • You received a pay raise or bonus, which included automatic 401(k) deductions.

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

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.

How to avoid a 401(k) over-contribution

Juggling multiple 401(k)s is challenging. Communicating with your employers and plan administrators to stay on top of the issue is the best way to stay on top of the situation before it ends up costing you big-time.

How to fix a 401(k) over-contribution

The IRS allows until April 15 of the following year to correct an over-contribution error. They recommend contacting your plan administrator to fix the problem by paying out the difference as an excess deferral. The plan administrator will pay you that amount by April 15, which counts as part of your gross income for the year in which it was contributed. The interest earned on the amount is taxed when the money is withdrawn.

Ideally, you will check your distributions in January or February and initiate any withdrawals by March 1, so you’re not left scrambling after the deadline. Should you notice the error after April 15, the excess contribution will be taxed twice – tax on the excess the year it was contributed to the 401(k) and tax on whatever amount is withdrawn from the retirement account.

How to contribute more toward your retirement

If you’re looking to maximize your retirement savings, you are allowed to have multiple accounts. If you reach the contribution limits of your 401(k), for example, you can open a high-deductible health spending account, as well as a tax-deductible or Roth IRA.

Contact Ubiquity

As a small business 401(k) plan provider, Ubiquity is responsive to the needs of employers and employees, including concerns about juggling multiple small business 401(k) plans or over-contributing. We provide employees with financial wellness tools to help you reach your goals.

Self-employed workers have a lot of advantages, but one of the biggest perks is the ability to contribute to a solo 401(k) plan. Solo 401(k)s are designed for small businesses that solely employ the owner (or the business owner, spouse), and/or business partner. They allow participants to contribute almost three times as much money as an IRA.

What are the contribution limits for a solo 401(k)?

If you are self-employed and have been doing so for over two years (and expect to remain so), then the maximum amount that can be contributed each year is $66,000 per person. (That number’s not a typo!) Similar to an individual 401(k), the maximum you can contribute is $22,500 for 2023 if you’re under 50, and $30,000 if you’re age 50 or older. However, as your own employer, you can also contribute up to 25% of compensation, with a maximum of up to $66,000 per year in 2023, with an additional $7,500 catch-up contribution allowed if you are age 50 or older.

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

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 solo 401(k) offers many benefits:

  • It allows you to save more money than other types of retirement accounts because there are no income limits on contributions.
  • You can take penalty-free withdrawals at any time after age 59 ½ without paying taxes on the withdrawal.
  • If you leave your business for any reason (such as selling) before reaching age 59½, all money withdrawn will be subject to your regular income tax rates. The money can be rolled into an IRA or another qualified retirement account. If taken as cash withdrawal it may be subject to taxes.

How do I contribute to a solo 401(k)?

Contributions to a solo 401(k) are made by your business, not you. You can contribute up to the maximum amount, which is $22,500 for 2023 an additional $7,500 if age 50 or older. This limit increases annually with inflation.

A solo 401(k) allows you to make contributions on behalf of yourself and anyone else who works for your company, including yourself if you are self-employed or work part time as an independent contractor/consultant outside of regular job duties at another company or organization.

How much should I contribute to my solo 401(k)?

You can contribute to your solo 401(k) until April 15 of the following year (or when you file your company taxes). You can use an online paycheck calculator to determine how much you can afford to contribute from each paycheck, up to the 2023 maximum limit of $22,500, or $30,000 if you are age 50 or older.

Are there any other advantages of having a solo 401(k)?

  • Glad you asked. As someone with a solo 401(k), you gain access to some unique perks that aren’t available through other accounts like Roth IRAs: You can take money out without paying taxes or penalties if it’s used for certain expenses (such as buying a home or paying medical bills). These are known as hardship withdrawals.
  • The solo 401(k) is a great option for self-employed people who want to save for retirement. You can contribute more money to this type of account than you would be able to contribute to other types of accounts like Roth IRAs or traditional IRAs. Plus, there are no income limitations on contributing, so even if your income doesn’t qualify you for other types of retirement plans, a solo 401(k) might make sense for you.

Learn how to set up your own solo 401(k) here.


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.

As a small business owner, it’s imperative that you ensure your employees are prepared for retirement. After all, you care about them and their financial future. These helpful strategies will help ensure that your employees are ready for what comes next.

Why retirement planning is (extra) important for small business employees

Retirement planning is essential for everyone, but especially for employees of small businesses that may not have the deep pockets that a major corporation does—and the sooner they start saving, the better. Many small business employees may not have access to the same retirement benefits as those at larger companies, such as pension plans or stock options, which can make it harder to save.

Additionally, small business employees may be more vulnerable to financial shocks that may arise such as unexpected medical expenses or a job loss. Having a healthy retirement plan can help provide a safety net for these (and many other) unexpected expenses.

Most people significantly underestimate the amount of money they’ll need in retirement and may not save enough to be able to maintain their current lifestyle after retirement. By educating your employees on the importance of retirement planning, you can help them avoid this common pitfall. Future them will thank you.

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

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.

3 biggest benefits of saving in a 401(k)

These are the top three most compelling reasons for your employees to participate in your small business 401(k) that they need to know now:

High contribution limits. One of the most important benefits of a 401(k) is how much money each individual is permitted to contribute each year. These limits are set by the IRS, and typically increase annually to keep up with inflation. The maximum contribution in 2023 is $22,500 for people under age 50. For those aged 50 and older, the total is $30,000.

Tax savings. Be aware 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.

Compounding interest. Another big benefit offered by 401(k) plans is compounding interest. This is a saver’s best friend. When you invest in a 401(k), the money you add generates interest. Then the interest itself generates interest (compounding) and can grow rapidly year over year.

How to educate your small business employees on retirement planning

There are a number of ways that you can help your employees learn more and feel confident with their retirement planning:

1. Offer employer-sponsored retirement plans

One of the most effective ways to encourage retirement planning is to offer employer-sponsored retirement plans, such as 401(k)s. These plans allow your employees to contribute pre-tax dollars to a retirement account, which can help reduce their taxable income and increase their retirement savings. Bonus points for offering matching contributions.

2. Provide ongoing education and support

Retirement planning can be complex, and many people may not know where to start. Consider providing ongoing education and support to your employees, such as financial advisors or retirement planning workshops. This can help everyone feel more confident in their retirement planning.

There are lots of online tools you can share with employees – and use yourself– that help them with the logistics of retirement planning. One great tool is a paycheck calculator, which helps people determine how much they can afford to contribute from each paycheck.

There are also 401(k) calculators that can help participants figure out how much they can expect to save over their own expected time horizon. The information these calculators take into account includes age, income, current savings amount, expected age of retirement, probable rate of return, and more.

3. Create a culture of contribution

You can lead by example, provide education, and make it easy for your employees to set up their 401(k)s. By being open and clear about offerings and benefits, more employees are likely to use the investment options you present. You can even take it to the next level by making retirement planning and benefits information part of your small business’s onboarding process.


Read Ubiquity’s 3 Steps to Building Financial Security in an Economic Downturn

Read Now
Read the Definitive Guide to Small Business 401(k)
Download Your 401(k) Guide Now

© 2023 Ubiquity Retirement + Savings
Privacy Policy
Do not sell my info
44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

Facebook Twitter LinkedIn YouTube

© 2023 Ubiquity Retirement + Savings
Privacy Policy
Do not sell my info
44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

Show Exit Modal