Affordable Retirement and 401(k) Plans for Every Business

A 401(k) retirement plan is an account that lets employees contribute a portion of their pay, either pretax or Roth (after-tax), toward retirement. Employers can choose to match employee contributions or offer profit-sharing, though these contributions are optional. 401(k) plans are a popular choice for businesses of all sizes—entrepreneurs, small businesses, and large corporations—especially as traditional pensions become less common and the future of Social Security remains uncertain. Explore the different types of retirement plans, 401(k) options, and their benefits to find the right fit for your business.

The most common retirement plans for employers are 401(k) plans, valued for their flexibility and higher contribution limits compared to options like IRAs. These plans allow businesses to tailor features to meet their needs while offering employees a powerful way to save for retirement.

There are several types of 401(k) plans, each with unique rules and benefits:

• Traditional 401(k): Employees contribute pre-tax dollars, with tax-deferred growth until withdrawal. Employers can offer matching or profit-sharing contributions, though it's not required.
• Safe Harbor 401(k): Exempts employers from most IRS nondiscrimination testing if specific contributions are made to employees' accounts.
• SIMPLE 401(k): Designed for small businesses with 100 or fewer employees, this plan requires fully vested employer contributions and avoids annual nondiscrimination testing.
• Pooled Employer Plan (PEP): Allows businesses of any size to pool resources, helping to reduce fiduciary liability, simplifying administration, and potentially lowering costs.
• 403(b): A tax-sheltered annuity plan for public education systems and certain 501(c)(3) organizations.

Each plan has its pros and cons. A retirement specialist can help you evaluate options and choose the best fit for your business.

Typical 401(k) management fees include:

• Plan Administration Fees: Cover day-to-day operations like recordkeeping, accounting, legal, and trustee services.
• Investment Fees: Pay for investment management and related services within the 401(k) plan.
• Individual Service Fees: Charged to participants for specific features, such as taking out a plan loan.

Understanding these fees is essential for managing costs and ensuring your 401(k) plan remains efficient and beneficial for both employers and employees.

Determining how much to contribute to your 401(k) depends on factors like your financial goals, income, expenses, employer matching, and tax benefits. Since 401(k)s are designed for long-term savings, accessing funds isn’t always possible, with some exceptions. Maximize contributions when possible, especially to take full advantage of employer matching. Explore contribution limits and other 401(k) details to make informed decisions for your retirement savings.

To check your 401(k) balance with Paychex, use the Paychex Flex platform. Accessible via mobile app or online portal, the dashboard lets you easily view your balance, track contributions, manage your account, and use convenient online tools to help optimize your savings. Explore how to enroll in a Paychex 401(k) plan today to take full advantage of these tools.

You can call Paychex retirement services at 800-472-0072, Monday through Friday between 8:00 a.m. and 8:00 p.m. ET. You can also find support options for retirement and other Paychex services on our Paychex support page.

The cost of a Paychex 401(k) plan depends on factors like your business size and the services you require. Plans can be as comprehensive or as simple as you need, with flexible solutions tailored to your unique needs—ensuring you only pay for what you use. For an accurate, personalized quote, contact Paychex Sales to design a 401(k) plan that aligns with your budget and business goals.

Offering a 401(k) plan is more affordable than many small business owners realize. To select the right provider, consider these key steps:

1. Assess Your Needs and Budget: Determine the number of employees, your budget for setup and ongoing fees, and the level of support you’ll need. Decide if you’ll offer matching contributions now or in the future.
2. Research 401(k) Types: Work with a provider to identify the best 401(k) or combination of retirement plans for your business.
3. Evaluate Costs and Fees: Look for transparent pricing, including setup, administration, and investment fees. Ask if employees will incur any additional costs.
4. Review Investment Options: Ensure the provider offers diverse, low-cost investment options like mutual funds, index funds, and target-date funds. Check for access to professional advice or automated tools.
5. Examine Service and Support: Confirm that both you and your employees can easily access assistance, especially if integrating the plan with payroll services.

By evaluating these factors, you can choose a 401(k) provider that aligns with your business goals and offers employees a valuable retirement benefit.

Paychex 401(k) integrates directly with many payroll providers, including Paychex Flex.