Allen & Furr Insurance understands the significance of providing retirement benefits that cater to the financial well-being of your employees. Among the various options, 401(k) plans have become the cornerstone of employer-sponsored retirement savings in the United States. These plans, named after the corresponding Tax Code section, have largely replaced traditional pension plans, giving employees greater control over their retirement savings.

Unlocking the Potential of 401(k) Retirement Plans

401(k) plans, often integrated into qualified profit-sharing plans, empower your employees to contribute portions of their salary to individual accounts. These deferrals are generally excluded from employees’ taxable income, offering an immediate tax advantage. However, when an employee eventually retires, the distributions, including earnings, from their 401(k) account are considered taxable income.

Enhancing Retirement Savings

Employers have the option to boost retirement savings further by contributing additional funds to their employees’ 401(k) accounts. These contributions, subject to specific limitations outlined in the Internal Revenue Code, can be deducted on the employer’s federal tax return, offering a valuable incentive for businesses to support their employees’ retirement goals.

Exploring 401(k) Plan Options

Selecting the right 401(k) plan can be a complex decision, as different options come with unique rules and advantages:

• Traditional 401(k): This plan enables employees to make pre-tax deferrals through payroll deductions. Employers can choose to match employee contributions, make contributions on behalf of all participants, or implement both strategies.
• Safe Harbor 401(k): In this plan, employer contributions are fully vested when made, offering a level of security for employees. These contributions may include matching contributions to employee deferrals or contributions for all eligible employees.
• Simple 401(k): A cost-effective choice for small businesses, the Simple 401(k) does not require annual nondiscrimination tests. Employers are obligated to make fully vested contributions.

Tailoring Your 401(k) Plan

At Allen & Furr Insurance, we recognize the importance of finding the right 401(k) plan that aligns with your company’s goals. Our dedicated agent in Roswell, Georgia, is here to guide you through the process, helping you select the plan that best serves your employees and your business. Contact us today to explore your options and take the first step toward providing your employees with a solid retirement savings foundation.