2019 Best Small Business 401k

Setting up a retirement account for your small business is a powerful recruiting tool for three reasons: 

First, you demonstrate a strong conviction that your business is going to be around for a long time.

Would you want to apply for a company that could be gone in just a year?

An employer-sponsored 401(k) proves that you have a long term financial commitment with your business and your employees. 

Second, employer-sponsored retirement accounts cost less than what you might think.

Third, you allow your employees to effectively reduce taxable income for this year and defer those taxes until retirement when they’re more likely to be in a lower tax bracket.

How to Set Up a 401(k)

There are multiple steps involved in setting up a 401(k) for your business, and you should consult with a financial professional before diving in. While the specific steps may differ depending on your plan needs, there are a few general first steps.

  • Choose who will set up the plan. If you don’t want to set up the plan yourself, consult with an advisor, bank, mutual fund provider, or insurance company for assistance.
  • Adopt a written plan. Every 401(k) plan requires a written document, approved by the IRS, that will serve as your go-to guide for plan operations. If you work with an advisor or financial institution, they may provide this for you. Regardless of who creates it, you must adhere to all terms of the document.
  • Set up a trust tohold the plan’s assets. Your 401(k) trust must have one or more trustees who will manage the plan’s investments, contributions, and distributions.
  • Choose a system for recordkeeping.It’s essential to track and attribute all of the plan’s earnings, losses, contributions, expenses, investments, and distributions. Choose a recordkeeping system that will help you prepare the requisite annual report that must be filed with the government.
  • Give your employees the plan information.Provide guidelines on who is eligible and how they can participate. You are required by law to provide a summary plan description (SPD) so employees know how the plan operates.

The Department of Labor offers additional guidelines on setting up and managing a 401(k), and can help business owners navigate these first steps.

Is my company big enough to set up a 401K?

No company is too small to invest in a 401(k).

It doesn’t matter whether or not the person is self-employed or how many employees the company has.

It can be any size.

All that’s needed is the desire to set up a plan.

Any owner-only business can qualify for an individual 401(k) — often referred to as a solo 401(k).

The advantage to a solo plan is that the employer is also the employee.

That means you can set aside $18,000 tax-deferred. If you are over 50, you can do a catch up of another $6,000. You can also do profit sharing if you make enough money — up to $53,000 between employer and employee and $59,000 if you’re over 50.

Help setting up a 401k for small business: Mintco Financial 401 Advisors Buffalo NY and Tampa Bay Florida

We understand running a business is a full-time commitment, so we’re here to make it easy to set up a retirement program for your hardworking employees.

Contact us at

Buffalo NY 716-565-1300

Tampa Florida 813-964-7100