What Small Business Owners Need to Know About 401(k)'s

Reader Comments
Back to article

the govt regulations and paperwork is a nightmare... get ready to be audited by some burecrat! 401K is a red tape big govt nightmare!

eat me of CT 10:25AM June 30, 2011

Great Info, I was unaware that sole proprietors without employees can get in on 401(k)'s to plan retirement
http://www.ira401k.info

Matt of AZ 4:12PM March 05, 2009

Can you offer any information as to help me pursue this, grants , federal grants a? how does it work for some, do they know the right channel? thankyou

wende of AL 7:57PM February 18, 2009

1.Explain how human resouce management can be instrumental in helping a company attain compectitive advantage?
2. What are the main things a company will do to recruit and retain a more diverse workforce?

kandhavel.k of NY 12:43AM December 27, 2008

We have a very small business and set up a Safe Harbor 401K last year thru Edward Jones. We have a 3rd party administrator annual fees (@800 + 75 per account) and it has been very expensive with addl annual fees to EJones (150 + 40 each account) . We wanted to discontinue it as our business is not profitable this year and want to reduce expenses as much as possible. I was told to discontinue it we would have to pay the 3rd party administrator about as much as the annual fees/ so not only would we have to pay 2008 match and fees , we would have to pay to get rid of it also--to satisfy the distribution aspects for the IRS. Was also told that a person that stopped working for in February, we have to pay his account fee at Edward Jones. We cannot force him to withdraw or rollover his account, unless it was under 1000. This doesn't seem right that we would have to pay the ex-employee account annual fees. If someone has any suggestions I would appreciate.

of HI 12:30AM December 02, 2008

I believe I am correct in saying that you would be subject to both the 10-percent early withdrawal (if you are under age 59 1/2) plus backup IRS withholding of 20-percent IF you take a "distribution" of the funds rather than doing a "rollover." Rollovers are the best way to go without question. Your current employers' Plan literature should spell out if/how that Plan would handle a rollover to your new 401-K.

BL of MD 12:28AM November 19, 2008

In response to: "How to setup a self directed 401k?" We too had difficulties finding a 401k provider at a resonable cost. Most of the low-cost mutual funds like Vanguard do not offer one directly. My wife and I, both self-employed, ending up setting up ours with T Rowe Price. There were near zero setup fees (if any), and the expense ration on a total stock market index is only 0.5% per year. I've had it there for a few years, and they have very reasonable.

Andy Wallace of CA 12:26PM November 12, 2008

I work as indepndent consultant with my own s-corp and solo 401k. I am planning to set up a self diretec 401k account, but the finaccial compnaies who do this are asking for a fortune for the setup and maintenance later. Is there way I can set it up my self? Do I need establish another corp (other than the one i own now) as trust company?
Thanks,
Demarco

Demarco of NJ 2:11PM October 14, 2008

Am currently employed and have 401K money with Employer. I would like to take the 401K money to start up a business. Will it be subject to the 10% early withdrawal?
Please advise... Thanks..

Leonardo De Guzman of CA 3:31PM September 16, 2008

I can't stress enough that the employer will get tremendous value from engaging an experienced third part to guide them on setting up a plan that really fits the employer's unique situation. Regardless of the level of employee participation, there are plan design options that allow the owners to meaningfully save for retirement. Be a savvy consumer when buying 401(k) or other Plan services! As for experience, the volume of similar clients the third party works with, ask for a track record from the thrid party (i.e. how many employer have you helped to estabilish and maintain a meaningful retirement saving plan and can you show me data that supports your answer?). Don't just buy an "investment product." That isn't the same as sponsoring a successful retirement Plan for your business which also meets your goals, as the business owner.

Lisa Showalter of PA 10:57AM September 03, 2008