401(k) Plan Types – How To Choose?

At first glance choosing a 401(k) or similar retirement savings plan can seem overwhelming if not downright complex. However, the truth is it really is rather simple you just want to ask these few questions.


  1. How much do I want to contribute every year?
  2. What is the main reason I am starting this Savings Plan?
  3. What are my monthly cash flow constraints?
  4. Are minimal plan startup costs a priority?


  1. If you desire to contribute as much as you can irregardless of what employees contribute, then go Safe Harbor 401(k)
  2. If the main reason is to help participants grow their wealth (including your wealth) then go Safe Harbor 401(k)
  3. If cash flow is tight month to month, then perhaps go Traditional 401(k) as to avoid employer contribution requirements associated with a 401(k).
  4. If your a small business and desire minimum plan costs, consider a Simple IRA. A low cost solution with minimum compliance oversight, however, funding requirements do exist.

This is the beginning of the conversation we have with Plan Sponsors similar to you. Contact us today and we can help you choose the plan perfect for your business. 


Leave a Reply