July 2025: Five, 401k, Three, Two One
Five fast facts about 401k’s from WLA’s perspective:
Know the limits: Owners can up to contribute up to $70k ($77.5k if over 50 yrs old) in a 401k. WLA will help you understand the three contribution buckets (employee deferral, employer match, optional profit share).
401k contributions can be either tax deferred or ROTH. I help my clients determine which is best for them.
Legacy 401k fees are TOO HIGH. Western Level often reduces the fees of the prior legacy 401k plan by 50% or more*.
In addition to outrageous fees, most folks are incorrectly allocated in their investments because no advisor is helping (WLA serves as a non-discretionary advisor to its 401k clients).
THIS IS THE WAY:
Lower your 401k fees
Increase your contribution levels (lower your taxes)
Improve your investment allocations
Learn how to optimize the plan for owners and key employees
That was too easy…Here are 5 more:
There are significant tax credits that will offset some of the cost of providing a new 401k plan for the first 3 to 5 years. It’s call the Secure Act…I’ll explain everything for you.
The small business 401k “cost to benefit” ratio for owners has never been better. A five participant plan runs about $1750 / year in fixed, annual cost**.
Why use mutual funds that cost 1.50% or higher when you can be in low cost funds that are 0.50% to 0.02% annual expense ratios? Fund expenses are often where the excessive fees are hiding.
Both CA and NV mandate a minimum level retirement plan for small businesses. If you are looking to establish a new plan, don’t get duped into adopting a high fee broker dealer delivered 401k.
The deadline for a new safe harbor 401k is OCT 1st.
If you are interested to improve an existing plan or want to set up a new 401k, let’s schedule a call and discuss your situation.
Schedule a call/zoom: https://calendly.com/westernlevel
Best,
Jon Fritzinger
415 596 2464
Related links:
https://westernlevel.com/commentary/401kprimer
https://www.calsavers.com/home/frequently-asked-questions.html
https://www.nevadatreasurer.gov/NEST/
https://www.irs.gov/retirement-plans/retirement-plans-startup-costs-tax-credit
https://www.irs.gov/retirement-plans/notice-requirement-for-a-safe-harbor-401k-or-401m-plan
*If you would like WLA to calculate the total cost of your existing 401k, drop me an email to get started.
**Current pricing for 2025 from a provider I utilize, more details at www.401go.com.