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Working With Professional 401K Providers

The Importance Of Working With Qualified 401K Providers To Invest In Your Future

As one of the area’s 401K providers, The Payroll Company understands that our clients often have many questions about this type of investment plan. Many of our partners, during our initial consultation, don’t know the various components of this type of retirement savings plan, or how it stands apart from other investment options. If you’re not certain that a 401K plan makes sense for you, read on; knowing the details and benefits of this type of investment plan can help you have a productive session when you meet with your company’s 401K providers.

A 401K savings plan offers a distinctive range of benefits, such as:

Tax deferred savings: Everything you contribute to this fund comes out of your salary pretax. The benefits of pre-taxed savings are you can lower your overall taxable income for the year and potentially lower your tax bill.

There’s an annual cap: Contributions to your fund have an annual cap. In 2014, the limit stated that individuals can contribute $17,500 for the year, while those 50 or older by year end are allowed to save an additional $5,500.

Your employer may match your contributions: Many of our partners are surprised to learn that some businesses actually match a specific percentage of their employee’s 401K contribution. Ask in advance what your company matches so you can plan accordingly.

Investment options: Another surprising feature for many investing in a 401K plan for the first time? Investors have a certain level of control over where they allocate their money. When teaming with companies as their chosen 401K providers, we help select a specific collection of funds. Individual contributors can designate various contribution percentages to certain funds to ensure they are comfortable with their investments for as long as they participate in the program.

Pre-retirement access: Yes, the money invested in this fund is designed for retirement; however, there are various circumstances that allow investors to access their savings. Many organizations allow participants the opportunity to borrow from their accounts for a fee as well as interest charges.

Rollover options: Worried that you’ll lose access to your 401K funds if you change companies? Don’t be — leaving your place of business often gives you 4 specific choices regarding your 401K: lump sum distribution, rollover funds into an IRA, rollover funds into new company’s plan, or leave your money in your current plan, even though you no longer work at the organization.

Eventual withdrawal: Despite the many benefits offered by a 401K plan, contributors can’t leave their money in their fund indefinitely. At The Payroll Company, our 401K providers work closely with plan participants to help them understand the specific requirements regarding withdrawing funds from the program.

No matter what the size of your organization, The Payroll Company’s 401K providers can help you implement the perfect savings plan for you and your employees. Want to hear more? Visit our website to learn more about our distinctive corporate approach, or click here to request more information.