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401(k)s are named for the section in which the Internal Revenue Code authorized and specified the use of this type of defined contribution plan that allows employees to make pre-tax contributions.
Generally, 401(k) plans are known to be a type of retirement savings plan that employers can choose to set up for their employees. Employee 401(k) contributions are automatically deducted from their paycheck each pay period before taxes are taken out. Employees' contributions are invested, at their choosing, into one or more funds provided in the plan. Employers may choose to match the funds. Employer costs for plan are tax-deductible and employees' contributions are tax-deferred. Different types of 401(k)s include:
Traditional 401(k) Plan
Safe Harbor 401(k) Plan
SIMPLE 401(k) plan
Other 401(k) features may include a Roth option or allow for a Solo 401(k) type. The Roth option allows employees to have their contributions deducted after taxes are paid. The Solo 401(k) option allows for the owner, owner and partners, or owners, partners and spouses to implement their own 401(k).
Sure401(k) can provide you with an easy-to-use traditional 401(k), safe harbor 401(k), Solo(k) or 401(k) with a Roth option plan. Calculating retirement savings helps most small business employers and employees decide what plans and contributions are right for them.
For more information on Sure401(k), call 866.497.2028.