U.S. Department of Labor
Small Business Retirement Savings Advisor
401(k) Plans are defined contribution plans funded primarily by the pre-tax contributions of employees. These plans, named for the section of the Internal Revenue Code that establishes this type of retirement plan, allow employees to save part of their salaries and defer paying taxes until they receive the money. Employers can match the contributions, which are also tax deferred.
In Automatic Enrollment 401(k) Plans, employees are enrolled unless they opt out and contributions are deducted from their paychecks. Automatic Enrollment 401(k) Plans can increase plan participation among rank-and-file employees and make it more likely the plan will pass the test ordinarily required under a traditional 401(k) plan. In addition, for certain default investment options provided under the plan, there is relief from liability for the investment results.
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- I would like to consider other retirement savings programs.
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