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Using a 401k in Your Small Business Retirement Options

Article ID: 242
Last updated: 25 Nov, 2018
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By Jason Watson ()
Posted November 23, 2018

A 401k plan is a defined contribution plan. Specifically, the name 401k refers to the section in the IRS code that allows for retirement plan contributions to give you an instant tax savings. Technically it is Title 26, Chapter 1, Subchapter D, Part I, Subpart A, Section 401, Subsection K.

Subchapter D deals with deferred compensation. Part I deals with pensions, profit sharing, etc. Subpart A deals with the general rule. Section 401 deals with qualified pensions, profit sharing, etc. And Subsection K deals with deferred arrangements. Who knew?

But from there, the 401k plan has several variants and options. We’ll be exploring-

  • i401k, Solo 401k, Solo K, Uni K, Owners Only 401k

  • Traditional 401k (when you have a staff, yuck)

  • Safe Harbor Provisions for 401k Plan Testing

  • Roth Options with a 401k Plan

  • Two Plans, Rolling Old Plans

  • Loans and Life Insurance

  • Age Based or Tiered Profit Sharing Add-On to a 401k Plan

  • Defined Benefits Pension / Cash Balance Add-On to a 401k Plan

  • SIMPLE 401k (not the same as SIMPLE IRA)

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Tax Savings and Tax Deferrals       The Owners-Only 401k Plan