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401(k) & Profit Sharing

401(k) and Profit Sharing

401(k) and Profit Sharing Plans offer convenient and automatic retirement savings. They help employers attract quality employees and provide deductible business expenses.

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Benefits

  • Contributions are a deductible business expense
  • Attract and retain employees
  • Employer chooses plan type that works best for business' needs
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Who Contributes1

Employer: Discretionary, up to 25% of employee's compensation or $61,000*, whichever is less

Employee: Roth or pre-tax 401(k) up $20,500*

Employees age 50+: Up to $20,500* plus $6,500* in catch-up contributions (if plan permits)

* Limits listed are for 2022. The IRS sets limits annually.

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Plan Details

Deadline to Establish: Employer's tax filing deadline

Deadline to Establish Safe Harbor 401(k) only: Must be effective at least three months during the first play year, usually October 1

Eligible Employers: Almost any type of business

Participant Fee: $25 annual service fee deducted from each participant's account

Benefits Comparison

Traditional 401(k)

  • Discretionary Employer Contributions
  • Salary Deferrals, including Roth
  • Annual ADP/ACP Testing
  • Vesting Schedule

Safe Harbor 401(k)

  • Mandatory Employer Contributions
  • Salary Deferrals, including Roth
  • Vesting Schedule

Profit Sharing

  • Discretionary Employer Contributions
  • Vesting Schedule

Compare Plans and BenefitsGet the Workplace Guide

Plan Administrator Responsibilities2

  • Distribute completed Summary Plan Description
  • Distribute annual 404(a) Participant Disclosures
  • Distribute applicable employee notices and disclosure required by the plan
  • File IRS Form 5500 annually
  • Perform appropriate IRS testing based on plan features

Support & Guidance

  • Wide range of no-load mutual funds available
  • One-on-one guidance, plus education and tools to help you and your employees plan for retirement
  • Easy online access to track investments and make changes
  • Secure Plan Sponsor Access website for convenient management
  • Distribution services available for tax reporting

Investment Options

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Explore Our Diversified Portfolios

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Explore Our Full List of Mutual Funds

Establish Plan Now - Employer Checklist

Complete the steps below to establish your plan. Call 1-800-345-3533 if you have questions or need help.

Step 1: Review the Plan Document. If you need plan documents, please contact us.

Step 2: Review and complete the required paperwork.

Step 3: Instruct Employees to Complete the Participant Investment Elections  form and return their completed form to you. Make a copy for us.

Step 4: Return these forms to us:

  • Copy of Adoption Agreement
  • Participant Investment Elections forms for every employee
  • Retirement Plan Services Application

By Fax: 1-888-327-1997

By Mail:
American Century Investments
PO Box 419385
Kansas City, MO 64141-6385

Step 5: Instruct Employees to designate beneficiaries. Have employees complete beneficiary forms and retain them for your records. Do not return to us.

Step 6: Review Purchase Guidelines and submit contributions.

Complete the Purchase Guidelines  form and submit contributions.

OR

Sign up for Plan Sponsor Access  to submit contributions electronically through our secure website. Contact us at 1-800-345-3533 to get a user name and password.

Have Questions or Need Help?

Call us to speak to a Business & Retirement Specialist.

1-800-345-3533

1 Contributions may only be based on the first $305,000 compensation, as adjusted. Combined employer and employee is limited to 100% of compensation or $58,000, whichever is less, excluding catch-up contributions.
2 Additional Plan Administrator responsibilities apply.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.

Diversification does not assure a profit nor does it protect against loss of principal.