For a small business, 401k administration might seem like a foreign language. Establishing and running a 401k properly can be a little confusing. Employees enjoy 401k retirement tools to help them save for retirement and establishing a company 401k can be very beneficial for employee recruitment and retention. There are a couple of things to consider when establishing your company 401k account:
Find a Reputable Administrator
401k plans are offered by many different companies. You will want to make sure that you find a company that has been in business for a number of years. An experienced 401k administrator can help you avoid some of the problems that you might encounter along the way. Find one that offers low fees and many investment options for your employees.
As the employer, you will get to decide how much you contribute to the plan. As a benefit, the matching contributions that you make to the plan are tax deductible. Therefore, you will have to look at your financial situation as a whole and decide how much you should contribute each year. With this method, you can help your employees and yourself.
Keep in mind that contributions are not required. In fact, they are becoming less and less common in the marketplace. However, contributions provide an added benefit when you are hiring employees and an edge over other companies to keep them working for you.