Retirement Plans for Small Businesses

Safe Harbor 401(k) Plans May Help Owners and Employees Save More

With standard 401(k) plans, the amount that a company’s owners or highly compensated employees can contribute is often restricted by how much other employees contribute to the plan, making such plans a less effective savings vehicle for many small businesses. However, with the more flexible safe harbor option, owners may be able to make larger contributions for themselves (as employee and employer) in exchange for making tax-deductible contributions or “matches” for employees.

In addition, the annual IRS non-dis-crimination testing that normally applies to standard 401(k) plans is eliminated from safe harbor plans, which typically makes them easier and less expensive for small businesses to maintain.

To help shelter more of your income from taxes, and possibly help your employees do the same, compare the benefits and limitations of safe harbor 401(k) plans to other retirement plans to determine which one could best meet your company’s needs.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald.

1700 Iowa Street, Bellingham, WA 98229
Phone: (360) 671-1845 Fax: (360) 671-2247 Email: office@genebellassociates.com

IMPORTANT NOTE: Gene R. Bell is a registered representative registered with the following registrations 6, 63, 65, 7 and can transact business with clients in ID, WA. Gene R. Bell is also an investment advisor representative licensed in WA. Seth Lake is a registered representative with the following registrations 66, 7 and can transact business with clients in WA, OR. Seth Lake is also an investment advisor representative licensed in WA. Heidi Henderson is a registered representative with the following registrations 6, 63 and can transact business with clients in WA. If you are not a resident of the states noted above, all investment-related information on this site is for informational purposes only and does not constitute a solicitation or offer to sell securities or insurance services over the internet. Securities offered through H.D. Vest Investment ServicesSM, Member: SIPC, Advisory Services offered through H.D. Vest Advisory Services SM, 6333 North State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000.

Investments & Insurance Products:

The information contained in this communication is for general guidance only. Accordingly, this information is provided with the understanding that the neither author nor publisher is herein engaged in rendering legal advice or services. The information itself should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisor. This information is without warranty of any kind, express or implied. This written advice is not intended or written to be used, and it cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

Gene Bell & Associates is not a registered broker/dealer or independent investment advisory firm

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNERTM and federally registered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements.