Traditional 401(k) Plan

What is a Traditional 401(k) Plan?

A traditional 401k plan is ideal for companies who want to provide a benefit to their employees but do not want to be required to make a company contribution (e.g. match or profit-sharing). Company contributions are completely discretionary in a Traditional 401k plan.

Maximum Deferral Amount (employee contributions):

  • The IRS Limit: $19,500 for 2020

Catch Up Contribution (for participants over age 50):

  • The IRS Limit: $6,500 for 2020; participants over age 50 may contribute $26,000 for 2020 ($19,500 + $6,500)

Eligibility Requirements (optional):

  • You may require an employee complete 12 consecutive months of employment with at least 1000 hours of service during those 12 months (one year of service).
  • You may choose to exclude employees who are under age 21.

Entry Dates (optional):

  • Monthly, quarterly or semi-annually.

Matching Contributions:

  • Discretionary.

Profit Sharing Contributions:

  • Discretionary; up to the IRS Limit of 25% of compensation (up to a maximum of $57,000 for 2020).

Vesting for employer contributions:

  • Up to a six (6) year graded vesting schedule.

Loans/Hardships (optional):

  • Loans and Hardship withdrawals may be permitted.
  • Minimum loan amount is $1,000.
  • Maximum loan amount is one half the vested account balance but no more than $50,000.

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Are you ready to get started?

Let us send you a proposal with all of the services we offer and show you the value provided with our 401(k) plan.