So, the IRS updated key 401(k) contribution limits and there is good news not just for employees, but also the small business owners. Employees are allowed to save $500 more each year, which really adds up. For owners, the good news is that the threshold has been updated for highly compensated employees, and now stands at $120,000. This means that it may just make it easier for you to pass your non-discrimination tests this year!
You can now save more in taxes and possibly compensate top employees (including yourself) more.
David Ramirez, CFA, is a recognized 401(k) expert with over 20 years of experience in 401(k), ERISA, cash balance plans, and ESOPs. A UC Berkeley graduate, he played a pivotal role at Financial Engines, a 401(k) advisory firm founded by Nobel Laureate William Sharpe, Ph.D., where he was a portfolio manager who helped manage over $50B in 401(k) assets. His clients included some of the largest Fortune 500 companies and state governments.
Go beyond a basic 401(k)
Give your employees more than just a 401(k), join the movement.