If you reside in other states, it doesn’t hurt to check just in case and explore your options.
For most small business owners, four types make the most sense: traditional 401(k)s, Roth 401(k)s, safe harbor 401(k)s, and solo 401(k)s.
Traditional 401(k) A traditional 401(k) plan allows employees to use pre-tax dollars through payroll deductions to save for retirement and defer taxation until retirement.
Employers have the option to make matching contributions based on the employee’s contributions or on behalf of the plan participants.
And it’s not just workers; it’s also business owners, freelancers and independent contractors.
Regardless of their generation, 60% of independent contractors and small business owners report not saving enough for their retirement.
demonstrate a strong conviction that your business is going to be around for a long time.
Would you want to apply for a company that could be gone in just a year?
Several states, including Connecticut, California, Massachusetts, and Virginia, have already approved bills requiring feasibility studies to implement retirement plans for small businesses or mandating small businesses to either offer retirement plans or enroll employees in retirement savings program run by the state. The SB-1234 Retirement Savings Plans bill will become effective in January 1, 2017, requiring small business with at least five employees and no small business retirement plan to participate in a state-sponsored individual retirement account (IRA) managed by a state-selected financial company.
Businesses with 100 employees have to comply first.