Small Business 401(k) Blog

The conventional wisdom about 401(k) fees is that participants in small business plans pay higher account fees than participants in “mega” plans sponsored by large corporations. In truth, a small business can help their participants pay less by paying all 401(k) administration fees from a corporate account. Why would a small business owner incur this expense when they can pay the fees from plan assets - like most large corporations do - instead? To grow their personal 401(k) account faster while lowering their taxable income.

To retire as soon as possible, you must avoid three 401(k) pitfalls throughout your working years - high account fees, underperforming investments, and improper asset allocation. These pitfalls can cost you hundreds of thousands of dollars by the time you retire. The best small business 401(k) plans make these pitfalls easy to avoid – which can help you retire years sooner. Given the stakes, you should settle for no less.

Due to the power of compound interest, 401(k) participants can add hundreds of thousands of dollars to their savings – or retire years sooner - by keeping their account fees as low as possible throughout their working years. And yet, in my experience, few participants appreciate this indisputable truth. Employee Fiduciary would like to help change that. This month, we launched an online calculator to show users how much they can add to their future savings by lowering their 401(k) fees today. Our bet - most users will be shocked by the amount they find.

Switching jobs and unsure what to do with your 401(k) account? If you’d like to keep growing your retirement savings on a tax-deferred basis, you can leave your account in your former employer’s plan or roll it into your new employer’s 401(k) plan or an Individual Retirement Account (IRA). Rolling your account can seem like the obvious choice, but in some cases, leaving it could grow your retirement savings faster.

Not all 401(k) plans are created equal. Plans with minimal administration fees and top-rated investments can deliver dramatically higher returns for participants than plans with excessive fees and underperforming investments. Over time, these higher returns can help participants retire years sooner. Given the stakes, I recommend you settle for no less when saving for retirement.

When a small business offers a 401(k) plan, it’s often a win-win for business owners and employees. A 401(k) plan can help businesses attract and retain talent, incentivize performance, and lower taxes, while helping employees – including the business owner – meet their retirement goals. If you're a business owner, you've probably asked yourself at some point what you and your employees stand to gain by offering a 401(k) plan. The answer is probably a lot. Here are some of the top benefits.