Why Start a 401(k)?
Good for you, good for your company
Many financial experts agree that 401(k)s are the preferred way to help build wealth
for retirement. 401(k) plans were created with unique advantages that can make a
real difference in your savings:
- $500 tax credit plus deductions to lower your cost
- The highest contribution limits among retirement options
- A Roth option with no income limits
401(k) Advantages Over Traditional IRAs
|
|
401(k)
|
IRA
|
|
Annual limit per individual
|
$50,000
|
$5,000
|
|
Age 50+ catch-up amount
|
$5,500
|
$1,000
|
|
Roth income limit
|
None
|
$125K*
|
|
Penalty-free access, if needed
|
Yes, via a loan
|
No
|
A 401(k) also allows for a self-employed business, just like those with employees,
to contribute and/or receive up to 25% of W-2 payroll up to the
$50,000
limit, or
$55,500
if 50 years of age or more. As an owner-only business, you can profit share
the amount you desire up to the entire
2012
limit prior to tax time, give some as
an "employee" through year-end up to the
$17,000
employee
2012
contribution limit, or both!
And there's more! Read on to discover how a new small-business 401(k) can benefit
you.
Save more money, pay fewer taxes
IRAs are nice, but they lack some of the best features of a 401(k). Now small businesses
have access to a 401(k) designed specifically for them, with all the same advantages
that large companies have been enjoying for years:
Sound enticing? Click any of the above features to learn more, or read all about
owner benefits and
company benefits.