A Seattle-based provider of low-cost retirement plans for small- to mid-size businesses is promoting the idea of companies launching 401k plans as a sort of holiday employee bonus, and is temporarily waiving its setup fees as a way to incentivize action.
Through December 22, ShareBuilder 401k, a Seattle-based digital 401k provider specializing in low-cost, all-ETF retirement products and resources, is waiving set-up fees on all of its 401k plans—fees that normally run between $150for a self-employed business owner opening a Solo 401k and $495 to $995 for businesses with multiple employees.
“After a challenging 2020, a 401k can be a welcome and meaningful holiday gift that helps employees start the New Year right—with a renewed focus on building savings,” said ShareBuilder 401k President and CEO Stuart Robertson. “At a time when holiday parties and gifts are out of reach for many businesses, free set-up on a 401k plan provides an affordable way to still spread some cheer.”
Sharebuilder 401k notes that plans set up in December can also include an initial, tax-deductible 401k contribution from the business owner—be it a match or profit share—enabling them to not only provide an important employee benefit for years to come, but to also say “happy holidays” in 2020.
To help small business owners better understand the tax benefits of starting a 401k plan, ShareBuilder 401k has issued “Top Tax Reasons to Start a 401(k)” to help reveal, for example, how an employee like an owner has the ability to contribute and receive up to $57,000 pre-tax in 2020.
For Solo 401ks, the self-employed person serves as both the employer and employee. The owner can make up to$19,500 in contributions as an employee and add another 20% to 25% of earnings based on their business type (up to the 2020 limit). As long as the plan is installed by the IRS’ December 31 deadline, the owner has until their tax deadline (April 15, 2021 for most) to make employer contributions.
This isn’t the first time Sharebuilder 401k has temporarily waived or discounted its setup fees. The company waived fees in a June 2020 promotion, and discounted them ahead of an Oct. 1, 2019 national safe harbor plan deadline.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
