Safe Harbor 401(k) Plans

Peace of mind while saving for retirement

A safe harbor 401(k) plan can help maximize your retirement savings by avoiding annual IRS testing. September 16 is the Employee Fiduciary deadline to request a new plan for 2024. Earn up to $16,500 in tax credits by starting a plan now.

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Why choose a safe harbor 401(k) plan?

Simplified administration

Safe harbor 401(k) plans are exempt from the nondiscrimination testing that small businesses often fail, simplifying plan administration while ensuring owners can defer up to the legal limit.

Employee retention and recruitment

A safe harbor 401(k) plan positions your business as one who cares about their team's financial future. It's a powerful tool for attracting and retaining top talent.

Attractive tax credits

Enjoy the benefits of tax credits for initiating a safe harbor 401(k) plan. An opportunity to save for your employees' future while saving on your taxes – a win-win for everyone!

Why Choose Employee Fiduciary?

Our services are designed to make it easy for business owners to offer a cost-efficient plan that meets the needs of their employees and company.

Low and Transparent Fees

Keep more of your hard-earned savings! Nobody charges less for a custom retirement plan.

Real People, No Robots

You’ll talk to a dedicated person from the beginning to the end. We’ve got your back.

Investment Freedom

Access the investments you want - including cost-efficient index funds and ETFs - without markup.

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Have safe harbor plan questions? We have answers.

A Guide to Safe Harbor 401(k) Plans for Small Businesses - Including SECURE 2.0 Changes

Safe harbor 401(k) plans are popular with small businesses who struggle to pass IRS-mandated nondiscrimination testing. Our guide answers common questions.

Safe Harbor or Traditional 401(k) Plan – How to Decide

Safe harbor 401(k) plans are the most popular type of 401(k) used by small businesses today, but they are not the best fit for every small business.

Small Business 401(k) Tax Credits – SECURE 2.0 Updates

Discover three small business 401(k) tax credits that can help lower the out-of-pocket cost of starting a small business retirement plan. Plus, read the latest changes due to SECURE 2.0.

Frequently Asked Questions

What is a safe harbor 401(k)?

Safe harbor 401(k) plans are the most popular type of 401(k) used by small businesses today. Unlike a traditional 401(k) plan, they automatically pass the ADP/ACP and top-heavy nondiscrimination tests when certain contribution and participant disclosure requirements are met.

How much does a safe harbor 401(k) cost?

At Employee Fiduciary, a safe harbor 401(k) plan costs $1,500 annually plus a 0.08% asset fee. Our pricing does not differ based on whichever plan options you choose!

What are the cons of a safe harbor 401(k) plan?

The “cons” of a safe harbor plan are the two requirements that distinguish it from a conventional 401(k) plan.

Mandatory contributions: Each year the employer is obligated to make a contribution of approximately 3-4% of employees’ total compensation. Although there are ways to avoid the mandatory contribution, the consequences can be severe.
Participant notices: Before the beginning of each year, the employer is obligated to provide employees with a notice explaining the mandatory contribution and other features. In addition, a notice must be provided to each new-hire before he or she is eligible to participate in the plan.

What is the deadline for establishing a new safe harbor 401(k) plan?

In general, the first year of a new safe harbor 401(k) plan must be at least 3 months long – to give all plan participants the opportunity to make wage deferrals. Establishing a new calendar-based plan is October 1st. For 2024, Employee Fiduciary's deadline is September 16th in order to timely finish setup for establishing a new calendar-based plan as of October 1st.

What is the benefit of a safe harbor 401(k)?

Safe harbor 401(k)s automatically pass annual testing and allow business owners and other highly-paid employees to save up to $66,000, or $73,500 if you’re over 50. A safe harbor 401(k) plan also provides significant tax savings of up to $16,500, aids in attracting and retaining top-tier talent, and simplifies the process of retirement saving for businesses and their employees.