A safe harbor 401k plan is ideal for a young business owner looking to start small and put aside some money for retirement.
Safe Harbor 401k plans can be a better option for employers looking for ways to bypass some compliance tests. In exchange for the “safe harbor” status, employers are obliged to pay employers’ contributions.
A Safe Harbor Plan 401k will automatically be considered to meet some of the essential compliance tests.
Employer contributions made through Safe Harbor 401k are tax-deductible, reducing the employer’s taxable income.
As 401k can bypass certain compliance tests, all plan participants can maximize their contributions to the IRS limits.
The required mandatory employer contributions mean the 401k plan will be an attractive benefit to employees, which can help attract and retain employees and encourage them healthy plan participation.
