Question
How to set up a 401k plan?
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28th Oct 2009 by Joseph Pousada
If you are an employee and you are interested in participating in a 401k plan you should contact your human resources administrator and advise them you would like to participate. They will give you the guidelines for participating in the company plan.
If you are a business interested looking to set up a 401k plan for your business you have two options. The first option would be to go to your broker/dealer and ask about their 401k prototype plans. These 401k plans follow a prototype that has been pre-approved by the IRS. Your financial advisor will go over the different plans they have available as well as your investment options with those plans. Typically many brokerage firms will do the administration of the plan for you.
Another option you have is to have your attorney draw up a customized 401k plan. In this case your attorney would draft a plan with investment parameters that you are looking for and submit it to the IRS for approval. Once you have approval for your customized plan you can ask your advisor about having your 401k non-prototype plan with them. In this case typically, the brokerage firm will not administer the plan.
As a business, you may wish to explore the prototype plans offered by your financial advisor to see if they meet your needs. If they do not and you want to customize a plan to your needs, you always have the option to pursue a non-prototype plan.
If you are an employee and you are interested in participating in a 401k plan you should contact your human resources administrator and advise them you would like to participate. They will give you the guidelines for participating in the company plan.
If you are a business interested looking to set up a 401k plan for your business you have two options. The first option would be to go to your broker/dealer and ask about their 401k prototype plans. These 401k plans follow a prototype that has been pre-approved by the IRS. Your financial advisor will go over the different plans they have available as well as your investment options with those plans. Typically many brokerage firms will do the administration of the plan for you.
Another option you have is to have your attorney draw up a customized 401k plan. In this case your attorney would draft a plan with investment parameters that you are looking for and submit it to the IRS for approval. Once you have approval for your customized plan you can ask your advisor about having your 401k non-prototype plan with them. In this case typically, the brokerage firm will not administer the plan.
As a business, you may wish to explore the prototype plans offered by your financial advisor to see if they meet your needs. If they do not and you want to customize a plan to your needs, you always have the option to pursue a non-prototype plan.
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20th Oct 2009 In Retirement
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