No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Wednesday, October 22, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home 401k Plans

Will Your 401(k) Pass Non-Discrimination Testing?

by TheAdviserMagazine
2 months ago
in 401k Plans
Reading Time: 2 mins read
A A
Will Your 401(k) Pass Non-Discrimination Testing?
Share on FacebookShare on TwitterShare on LInkedIn


If you offer your team a 401(k) plan, you already know how valuable it is for attracting and keeping great people. But did you know the IRS has rules to make sure these plans don’t just favor owners or top executives? That’s where nondiscrimination testing (commonly referred to as ADP/ACP tests) comes into play.

Failing Tests

Every year, most 401(k) plans have to go through these tests to compare how much highly compensated employees (owners or folks earning over $160,000 in 2025) are saving compared to everyone else. If the gap is too big, the plan fails the test.

What happens if the plan fails the tests at the end of the year? Usually, it means you’ll have to refund contributions to your higher-earning employees or give additional contributions to the rest of your team. Neither option feels good. Refunds frustrate executives who are simply trying to contribute as much as possible, and making extra contributions can catch a business off guard with an unexpected expense. On top of that, repeated failures can invite extra IRS attention, and let’s face it, no one wants that.

The good news is, there is a way to limit your worry of failing: Safe Harbor plans

How Safe Harbor Helps

A Safe Harbor plan is designed to automatically pass the ADP/ACP tests. To qualify, the employer commits to making minimum contributions to employees’ accounts. That might be in the form of a straightforward match (for example, dollar-for-dollar on the first 3% an employee contributes, plus 50% on the next 2%), or a flat contribution of at least 3% of pay for every eligible employee, called non-elective contribution.

Why does this matter? First, your leadership team can contribute the maximum allowed by the IRS without worrying about the plan receiving the dreaded fail at the end of the year. And second, the rest of the employees that participate receive added benefit in the form of the match.

Yes, adopting a Safe Harbor plan does mean a financial commitment from the company. But in return, you get peace of mind about compliance, happier employees, and a stronger benefit offering to attract and retain talent.

401GO and Safe Harbor Plans

Nondiscrimination testing is a necessary part of keeping 401(k) plans fair, but with a Safe Harbor plan, you can skip the stress, keep the IRS happy, and help every employee save with confidence.

Securing a Safe Harbor 401(k) from a reliable provider can make all the difference. Choose one that has a modern platform, excellent customer support, and the flexibility to work with your financial advisor, if you have one. Choose 401GO.



Source link

Tags: 401knondiscriminationpassTesting
ShareTweetShare
Previous Post

5 Email Deliverability Tips to Help You Land More Sales

Next Post

Ryanair offers low fares from Tel Aviv for November

Related Posts

edit post
Don’t Let Your Clients Leave Their Retirement Behind

Don’t Let Your Clients Leave Their Retirement Behind

by TheAdviserMagazine
October 21, 2025
0

As someone who has spoken with and worked alongside thousands of financial advisors, one troubling pattern continues to emerge: many...

edit post
Quarterly Market Commentary, October 2025

Quarterly Market Commentary, October 2025

by TheAdviserMagazine
October 20, 2025
0

However, the smooth sailing for equities finally came to a sudden halt last week when trade tensions re-escalated between the...

edit post
Your Retirement, Your Rules – Slavic401k

Your Retirement, Your Rules – Slavic401k

by TheAdviserMagazine
October 14, 2025
0

What if your retirement wasn’t defined by age, rules, or anyone else’s expectations, but entirely by you?  Retirement is not a...

edit post
How 401(k)s Compare to Real Estate for Long-Term Wealth

How 401(k)s Compare to Real Estate for Long-Term Wealth

by TheAdviserMagazine
October 2, 2025
0

When it comes to building long-term wealth, two strategies stand out: investing in your 401(k) and investing in real estate....

edit post
Financial Planning Doesn’t Have to Be Intimidating

Financial Planning Doesn’t Have to Be Intimidating

by TheAdviserMagazine
October 1, 2025
0

When people hear the words “financial planning,” it’s common for nerves to set in. Many assume it’s going to take...

edit post
The Modern Retirement Solution: 401(k) Syndicate™

The Modern Retirement Solution: 401(k) Syndicate™

by TheAdviserMagazine
September 24, 2025
0

Looking for a way to scale your business? Most advisors build their retirement portfolio one plan at a time. When...

Next Post
edit post
Ryanair offers low fares from Tel Aviv for November

Ryanair offers low fares from Tel Aviv for November

edit post
Nvidia – NVDA: Pullback zum 50er-EMA! Was nun?!

Nvidia – NVDA: Pullback zum 50er-EMA! Was nun?!

  • Trending
  • Comments
  • Latest
edit post
77-year-old popular furniture retailer closes store locations

77-year-old popular furniture retailer closes store locations

October 18, 2025
edit post
Pennsylvania House of Representatives Rejects Update to Child Custody Laws

Pennsylvania House of Representatives Rejects Update to Child Custody Laws

October 7, 2025
edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

October 8, 2025
edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

October 17, 2025
edit post
California Attorney Pleads Guilty For Role In 2M Ponzi Scheme

California Attorney Pleads Guilty For Role In $912M Ponzi Scheme

October 15, 2025
edit post
Baby Boomers Are Flocking to This Florida Town — but Not for the Weather

Baby Boomers Are Flocking to This Florida Town — but Not for the Weather

October 9, 2025
edit post
‘Subsidy cliff’ will return in 2026 if Congress doesn’t act

‘Subsidy cliff’ will return in 2026 if Congress doesn’t act

0
edit post
Arizona Attorney General sues US House for not swearing in representative-elect Grijalva – JURIST

Arizona Attorney General sues US House for not swearing in representative-elect Grijalva – JURIST

0
edit post
As national debt accelerates to  trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’

As national debt accelerates to $38 trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’

0
edit post
Dem Gerontocrats Try To Crush Graham Platner in Maine Senate Race

Dem Gerontocrats Try To Crush Graham Platner in Maine Senate Race

0
edit post
Willow Processor Maps Molecules 13,000x Faster Than Supercomputer: Google

Willow Processor Maps Molecules 13,000x Faster Than Supercomputer: Google

0
edit post
15 Best-Paying States for Women in Construction

15 Best-Paying States for Women in Construction

0
edit post
As national debt accelerates to  trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’

As national debt accelerates to $38 trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’

October 22, 2025
edit post
Willow Processor Maps Molecules 13,000x Faster Than Supercomputer: Google

Willow Processor Maps Molecules 13,000x Faster Than Supercomputer: Google

October 22, 2025
edit post
Alleged loan fraud is frustrating but isolated

Alleged loan fraud is frustrating but isolated

October 22, 2025
edit post
‘Subsidy cliff’ will return in 2026 if Congress doesn’t act

‘Subsidy cliff’ will return in 2026 if Congress doesn’t act

October 22, 2025
edit post
Dem Gerontocrats Try To Crush Graham Platner in Maine Senate Race

Dem Gerontocrats Try To Crush Graham Platner in Maine Senate Race

October 22, 2025
edit post
Is the Internet Dead? – Banyan Hill Publishing

Is the Internet Dead? – Banyan Hill Publishing

October 22, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • As national debt accelerates to $38 trillion, watchdog warns it’s ‘no way for a great nation like America to run its finances’
  • Willow Processor Maps Molecules 13,000x Faster Than Supercomputer: Google
  • Alleged loan fraud is frustrating but isolated
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.