Costs of Setting Up a 401(k) Plan (VIDEO)Tax Planning Business Owner Planning
What's the cost of setting up a 401k plan? 401ks aren't actually that expensive to set up. Join Clayton & Wayne from Squire Wealth Advisors as they discuss the cost to business owners in Part 3 of our Business Owner series.
Clayton: A lot of people, when they hear about 401(k) plans, they think they're cost prohibitive. They think 'oh, it's going to cost so much to do it.' But what we're finding, especially now with Secure Act 2.0, setting up these plans is not that cost prohibitive. In fact, it's basically free for the first 3 years, with the tax credit.
Wayne: Yeah, they're some really good, new legislation as part of the Secure Act to encourage people to set up 401(k) plans, to give that option to their employees, even small businesses, wherein the IRS will give tax credits that will replace a lot of the income or the dollars that were spent or even put into the plan for that employee, and you'll get a tax credit for it on the other end. So we'd love to meet with anybody and show them what that looks like, and see if that really turns the dial a little bit to get them to put together a 401(k) plan for their employees. It's made that much more inexpensive, that much more beneficial, to have one. It's a little crazy for those of us who have been involved with the tax world too for a long time to see this just kinda given away so that you can have that incentive to set up a 401(k) plan. But take advantage of it while we have it!