What main types of 401k retirement plans are there for small businesses?
Added: October 9, 2006
If you are considering finding a retirement plan for your small business, you are probably wondering what type of options are out there. You want to look for something that is inexpensive to begin and to maintain, and something that is flexible to suit your company’s needs. If this is the case, then your best bet is probably a 401k plan for a self employed company, a company with between two and twenty people, or a company with twenty one and fifty people.
Self Employer 401k Plan
The Self Employer 401k plan, which is also referred to as the Solo 401k plan, is for business owners who do not have any full time employees. Spouses and other family members can work for the business owner and this type of business will still qualify for the Self Employer 401k plan. The features of this type of 401k retirement plan include a low cost to maintain as well as to open, absolute freedom and flexibility when making contributions, generous contribution limits, no complicated administrative requirements, and convenience with consolidation.
401k Matching Plan for Companies with Between Two and Twenty people
This 401k retirement plan is just like any other 401k plan for a large business. Employees need to contribute, or invest, a certain amount of money in order for the company to match it. Generally, since there are less people than a larger company, the amount of money that small companies need to invest tends to be higher. After working for the company for a certain of amount time or until a certain date, employees are allowed to withdrawal their funds. These plans are fairly inexpensive to start and maintain, flexible to suit the company’s needs, and convenient.