<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'>; <html><head><title>Article Directory Online : Free Online Article Submission - Articleonlinedirectory | 401k Plans For Small Businesses</title></head><body><h3>401k Plans For Small Businesses</h3><br /><br />By: <br /><br /><p>Many people believe that a 401k plan can only be used by a large business, but it is perfectly possible for a business employing fewer than 100 people to benefit from a 401k. Even a sole proprietor can set up a 401k plan to provide for retirement. The 401k retirement plans that are available for small businesses can ensure that employees working in these businesses can enjoy a secure and comfortable retirement.<br /> <br /> All 401k retirement plans work in essentially the same way. The participant contributes a certain amount of their salary directly into their 401k plan, before tax is deducted. The participant's employer may also choose to make matching contributions into the 401k. The money that is placed in the 401k plan will be invested so that it grows and will provide a good income during the participant's retirement. Various different investment options are available.<br /> <br /> Since the contributions that are made by the participant into their 401k are taken before tax is paid, the participant's taxable income is reduced and they are not required to pay tax on the money that goes into their 401k. In fact, they will not pay tax on this money until they begin to make withdrawals from the 401k. Their employer will also be eligible for tax credits when they set up the 401k retirement plan.<br /> <br /> Traditional 401k plans can involve a great deal of administrative work and the costs of running such a plan can be high. These plans are also subject to costly discrimination testing. This compares the contributions made by the highest earning participants in the business to those made by lower earning staff. If the balance is not right, then the business will be penalized. Safe harbor 401k plans are an alternative that allow businesses to avoid discrimination testing, although unlike the normal 401k, matched contributions are required.<br /> <br /> The SIMPLE 401k provides a better option for smaller businesses. It is more cost effective and does not require discrimination testing. The employer must make matched contributions for all eligible members of staff. The participants will enjoy the same benefits as those contributing to a traditional 401k, but their employer will experience lower costs and less administrative work.<br /> <br /> An individual who works as a sole proprietor can also enjoy the benefits of a 401k plan, as long as they have no employees other than their husband or wife. Solo 401k retirement plans are designed for people in this situation in order to ensure that they are able to save for retirement. A solo 401k is the simplest type of 401k to administer. It also has high limits for contributions.</p> <br /><br /><b>Author Resource:-></b> Find out more about <a href=http://benefitguard.com/small-business-401k>401K plans</a> and why every business owner should provide one for their employees at <a href=http://benefitguard.com>http://benefitguard.com</a><br /><br /><b>Article From</b> <a href='http://www.articleonlinedirectory.com/'>Article Directory Online : Free Online Article Submission - Articleonlinedirectory</a><br /></body></html>
