401(k) Retirement Plan Services In Seattle, WA

401(k) Services Overview

A 401(k) is used by employers looking to provide a retirement benefit for employees (and themselves). A 401(k) is flexible with the ability to create customs plans that allow for larger or smaller employer contributions as compared to only two options under a Simple IRA. Additionally, the amount employees can contribute to their retirement is larger than a Simple IRA at $22,500/year and $30,000 if over 50 years old. While many employers find the flexibility to be helpful, the costs of maintaining a 401(k) are high due to required IRS testing and the annual filing of the Form 5500 with the government. 

Primary 401(k) Plan User

• Any type of public or private company

• Generally most appropriate for companies with 20 or more employees

401(k) Plan Advantages

• Flexibility in plan design

• Allows employees to contribute and employer to match

• Profit sharing options

Who Can Contribute

• Funded by employee deferrals and employer contributions

2023 Employer Contribution Limits

• Employers may make a matching contribution or profit sharing contribution up to 25% of compensation up to a maximum of $66,000.

• Total employer / employee contributions cannot exceed $66,000

2023 Employee Contribution Limits

• Up to $22,5500 in salary deferrals; $30,000 if age 50 or older

Admin Responsibilities

• Form 5500 and special IRS testing to ensure plan does not favor highly compensated employees

Access to Assets

• Withdrawals can be taken upon a "trigger" event such as turning age 59.5, disability, termination of employment, or plan termination.

• Loans may be available. Hardship withdrawals may be available but a 10% penalty may apply if you are under the age of 59.5

401(k) Plan Set up Deadlines

• Deadline is based upon plan selection