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Why have a small business retirement plan?

An affordable and easy small business 401(k) plan from Ubiquity Retirement + Savings™ enables you to:

  • Attract and retain talented employees
  • Integrate payroll
  • Automate your plan administration
  • Receive up to $16,500 in tax credits over three years when you open a 401(k).*

    (*Up to $5,000 per year, plus an additional $500 per year for automatic enrollment for the first 3 years)

Uncomplicated Small Business 401(k) Plans

Keep what's yours with Ubiquity's flat-fee 401(k) plans.

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Retirement plans for small businesses can be easy to administer and maintain. Once the plan is set up, the primary responsibilities of the business owner are depositing plan contributions and providing plan notices to employees.

Retirement plans also offer tax benefits to the business, including the ability to deduct contributions, and for certain eligible employers, take a tax credit up to $5,000 per year for three years.

A retirement plan also provides tax benefits to those who participate in the plan. Contributions and investment earnings are not taxed until taken out of the plan.

A 401(k) plan can also allow after-tax Roth contributions, which will be taxable to you when you contribute them to your plan account but are tax-free if not withdrawn until you retire. Savers credits are also available for those who qualify.

2023 401(k) Contribution Limits

One of the most important benefits of a 401(k) is the large amount that can be contributed each year, tax-free.

Maximum employee elective contribution (age 49 and younger)

$22,500

Maximum employee elective contribution (age 50 and older)

Additional $7,500

Maximum employee elective deferral plus catch-up contribution (age 50 or older)

$30,000

Defined contribution maximum limit, employee + employer (age 49 or younger)

$66,000

Defined contribution maximum limit (age 50 or older), all sources + catch-up

$73,500

Highly compensated employees’ threshold for nondiscrimination testing

$150,000

Key employee officer compensation threshold

$215,000

Annual compensation limit for HCEs and Key Employees

$330,000

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Small business retirement plans – know your options

Providing a retirement plan is one of the most effective ways business owners can help themselves and their employees prepare for retirement.

One common myth among business owners is that offering a retirement plan to employees is not affordable. However, small business plans do not have to be complicated or expensive. Three types of retirement plans are popular with small businesses: SEP, SIMPLE IRA, and 401(k). Understand your options and the benefits available under each type of plan, and you will find the one that is the right fit for your company.

Types of Small Business Retirement Plans:

SEP Plan:

A Simplified Employee Pension (SEP) plan is an IRA-based retirement plan funded only with employer contributions. The employer may decide from year-to-year whether to make contributions as well as an amount to contribute. SEP contributions are deposited in an eligible employee’s traditional IRA. A SEP plan could be suitable for both a self-employed business owner and an employer with employees.

SIMPLE IRA Plan

A Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA plan is another IRA-based retirement plan option for small businesses. Only businesses with 100 or fewer employees may establish a SIMPLE IRA plan. A SIMPLE plan is like a 401(k) plan in that employees can defer a portion of their salary.

Unlike a 401(k) plan which requires complex nondiscrimination testing, SIMPLE IRA plans have no testing requirements.

In exchange for the more straightforward administration requirements, SIMPLE IRA plans have lower contribution limits than 401(k) plans and require the employer to make a matching or nonelective contribution for eligible employees.

A SIMPLE IRA plan would not be appropriate for a self-employed individual with no employees.

Small Business 401(k) Plan

A 401(k) is a savings vehicle established by a business to help the business owner and employees save for retirement. Employees can defer a portion of their salary into the plan, and many businesses choose to match a portion of the employees’ contributions, helping retirement savings grow even faster.

A 401(k) plan provides all the same tax advantages (tax deductions, tax-deferred earnings, and tax-credits) as the other types of plans, but a 401(k) plan also offers unique benefits:

  • Higher contributions limits than SEP or SIMPLE IRA plans
  • Option to make Roth (after-tax) contributions
  • Option to take a loan from retirement savings
  • Typically, a broader range of investment options

With the budget-friendly, easy-to-use 401(k) solutions from Ubiquity Retirement + Savings, small business owners can take advantage of all the benefits of a 401(k) plan, including our Single(k)® plan for businesses that employ only the owners (and spouses) or only employees who wouldn’t be eligible to participate in the plan.

 

Setting up a 401(k) can be complicated. Only Ubiquity gives small business owners access to 401(k) experts in addition to industry-leading, low, flat fees. Each sales expert has over a decade of experience assisting business owners in 401(k) plan design. Take advantage of this free benefit.
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© 2023 Ubiquity Retirement + Savings
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Do not sell my info
44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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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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