401K is savings plan for retirement which is sponsored by an employer. It allows workers save and invest some of their paycheck before taxes are taken out. Taxes are not paid until the money is withdrawn from the account. In Fidelity investment, 401K is also one of its products. 401K plans of Fidelity for small business via Fidelity Workplace Services has the ability to assist you offer competitive benefits to your employees.
Having a retirement plan is smart choice to help level the professional playing field between your small business and larger companies. A retirement plan which is good can help you to retain valuable employees who want retirement choices in their benefits package. Then, it also can attract talented people in today’s challenging job market. In addition, you will enjoy tax advantages that may be available to you as an employees offering the plan. This program can be suitable for public and private companies with more than 20 employees. The benefits that will be got by employees is tax-deferred growth potential and pre-tax contributions. The benefits for the employers is tax-deductible contributions. There are some key advantages of joining 401K Fidelity:
- Plan design which is flexible
- Having online access to accounts via NetBenefits
- Wide range of mutual fund options
- Clearly communicated administrative fees and competitive average expense rations
Fidelity has a product of self-employed 401K plan which is aimed for self-employed individuals and owner- only business and partnerships which can save more for retirement. Some reasons why you have to consider self-employed 401K plans are:
- There are wide range of investments.
- The contributions are by phone or by mail.
- There is no setup or annual account fee.
- You can access to Fidelity retirement professionals to help with your plan.
If you are interested in opening a self-employed 401(k), you are able to call 800-544-5373 and choose option 3 to speak with a small-business retirement specialist to see whether this plan is right for you.
In case you own an old 401 from a former employer, the team of Fidelity can help you weigh your choices. So, you are able to make the right decision for your specific needs. There are 4 choices regarding your old 401(k).
- Roll over to a Fidelity IRA
You can roll over to Fidelity and consolidate your retirement accounts in one place while you continue tax-deferred growth potential. You will get a wide range of investment choices that cost only $4.95 per online U.S. equity trade.
- Roll over to a new workplace plan
If permitted, this choice enables you to consolidate your 401(k) into one account while you continue tax-deferred growth potential and you will find various investment options by plan.
- Stay in your old workplace plan
If allowed, this choice allows you continue tax-deferred growth potential. However, you are not able to contribute again to the old plan.
- Cash out
If you withdraw the money from your 401K plan, your cash distribution will be subject to state and federal taxes and before age 59 ½, 10% withdrawal penalty may apply. In addition, your money will not have the potential to continue to grow tax-deferred.
When you think that you have to save for retirement, starting early has the potential to help achieve you goals. It is a good thing to learn how tax-advantaged accounts and strategies can help make the most of your contributions during your earning years. Retirement is important, but note that do not neglect other aims.