1) The good news to come from 401(k) plans was the CARES act. The provisions allowed individuals to access their retirement accounts for COVID-related expenses or hardships without harsh penalties and an overload on taxes. Please keep in mind that if you had to invade your retirement account to survive, you could spread the taxes over three years. You are also able to repay it to your 401(k) over that same three-year period and avoid taxes altogether.
2) There is a misconception that 401(k) plans are too expensive for many small businesses to implement. The opposite is true. These plans are perfect for small businesses and will fit into any budget.
3) Did you know there’s a tax credit available to companies that start a new 401(k) plan? That’s right, a tax credit – not a tax deduction. Let Uncle Sam pay for the cost of setting up a plan for you and your employees. This deduction can be taken for the first three years of the plan and can include the setup costs and costs associated with educating your employees about the plan.
4) The amount of 401(k) contribution limits remain unchanged for 2021. For those individuals under age 50, that limit is $19,500, and for over age 50, an additional $6,500.
We have successfully saved thousands of dollars for 401(k) Plan Sponsors and their employees simply by reviewing their current plans. Many things have changed over the last several years, which have driven down the costs considerably to these plans, but you have to be proactive by having your plan reviewed.
Let us help you review your plan and determine if your costs align with the current marketplace.
Please contact us at 716-633-1515 to schedule your free review whether you are looking to set up a new plan or review your existing plan. We look forward to working with you.