401(k) Plans

401(k) Planning as Part of Your Retirement Strategy

A 401(k) is an employee-sponsored, tax-advantaged retirement savings plan. The goal of 401(k) planning is to help you build retirement assets in a way that supports your future income needs and fits with the rest of your financial plan.

EP Wealth financial advisors can help you make decisions about contributions, investments, and withdrawals with that larger goal in mind. Rather than treating your 401(k) as a standalone account, we can help coordinate it with your other retirement assets so each part of your plan works toward the same retirement objectives. 

EP Wealth’s 401(k) Advisory Services

EP Wealth provides 401(k) guidance across the different stages of retirement planning.

Contribution Planning

Your contribution strategy can change as your income and financial priorities evolve.

EP Wealth can help you evaluate how much to contribute and whether traditional or Roth contributions may be appropriate for your circumstances. We can also review employer matching provisions and catch-up contribution opportunities that might be available through your plan.

EP Wealth advisors can help you evaluate these decisions alongside your other retirement accounts and your current tax position, so your full contribution strategy reflects your retirement goals.

Investment Guidance

Employees can choose how to allocate these funds among the investment vehicles available in their plan.

EP Wealth can help you assess those choices in the context of your full portfolio. That may include reviewing asset allocation and diversification. It may also involve evaluating how much investment risk is appropriate as you move closer to retirement.

For executives with substantial employer stock exposure, a 401(k) review may also be part of a broader conversation about concentration risk.

Retirement Income and Withdrawal Planning

A 401(k) eventually shifts from a savings vehicle to a potential source of retirement income.

EP Wealth can help you evaluate when withdrawals may fit into your retirement plan and how those distributions interact with other income sources. Tax considerations can also influence when and how retirement assets are accessed.

The goal is to consider the 401(k) within the larger retirement income strategy rather than deciding on withdrawals account by account.

Ongoing 401(k) Reviews

A 401(k) strategy that made sense five years ago may not fit your situation today. Changes in income, investment performance, or retirement timing can all affect how much you contribute and how the account is invested.

EP Wealth financial advisors review your 401(k) as your circumstances evolve. As retirement approaches, the focus can also shift toward withdrawal planning and how the account fits into your broader retirement income strategy.

Types of 401(k) Retirement Plans

The type of 401(k) available to you can shape how you contribute and which planning strategies may be available. EP Wealth financial advisors can help you make strategic use of the options within your plan based on how you want to save now and prepare for retirement.

Traditional 401(k)

A traditional 401(k) is the most common plan. Traditional contributions are generally made on a pre-tax basis. Income taxes are generally due when those funds are withdrawn.

Some plans also permit employers to make matching or other contributions.

Roth 401(k)

A Roth 401(k) follows the same contribution limits as a traditional 401(k), but contributions are made with after-tax dollars. Qualified withdrawals in retirement are not subject to income tax, which can be relevant for clients who expect to be in a higher tax bracket later in life.

Safe Harbor 401(k)

A Safe Harbor 401(k) allows employers to satisfy certain IRS nondiscrimination testing requirements automatically. In exchange for mandatory employer contributions, highly compensated employees can contribute at higher levels without restriction. This plan type is common among small and mid-size businesses. 

SIMPLE 401(k)

A SIMPLE 401(k) is available to businesses with 100 or fewer employees. It has lower contribution limits than a traditional 401(k) and requires employer contributions, but it involves less administrative complexity and is generally exempt from nondiscrimination testing.

Solo 401(k)

A Solo 401(k) is designed for self-employed individuals and business owners with no employees other than a spouse. It allows both employee and employer contributions, which can result in higher total annual contributions than an IRA. Solo 401(k) plans may also offer a Roth contribution option and loan provisions. Learn more about EP Wealth's business planning services.

Who Can Benefit From Our 401(k) Planning

401(k) planning can become more important as your financial life grows more complex. EP Wealth works with clients who may have substantial retirement assets, high compensation, multiple accounts, or major career transitions that create more decisions around how a 401(k) should fit into the rest of their retirement plan.

Professionals Building Wealth

As income rises, 401(k) decisions can have a greater impact on how retirement savings are structured over time. Financial advisors can help clients revisit contribution strategy and investment choices as their financial circumstances evolve.

Executives and C-Suite Leaders

Executives may have retirement planning needs that extend well beyond a standard 401(k). Equity compensation, deferred compensation, and concentrated employer stock can all affect how workplace retirement savings should be approached.

Business Owners

Business owners may need to consider both their own retirement strategy and the role of a company-sponsored 401(k). EP Wealth can help connect those decisions with broader business and personal planning.

Pre-Retirees

As retirement gets closer, the focus often shifts from accumulation to how retirement assets will eventually be used. A 401(k) review can help assess whether the account still fits the client’s investment approach and future income plan.

Retirees

In retirement, 401(k) decisions may center on withdrawals and coordination with other retirement resources. Financial advisors can help clients think through how distributions fit into the broader retirement plan.

401(k) Strategies for High Earners

High earners may face contribution limits, tax tradeoffs, and compensation structures that make 401(k) planning more complex. Depending on the plan, a financial advisor may consider strategies such as:

• After-Tax 401(k) Contributions. If the plan permits them, additional after-tax contributions may create another way to build retirement assets beyond standard employee deferrals.
• Mega Backdoor Roth Strategies. Some plans allow after-tax contributions to be converted or rolled into Roth assets, creating additional Roth savings opportunities.
• Deferred Compensation Coordination. Executives may need to coordinate 401(k) elections with nonqualified deferred compensation and other workplace benefits.
• Equity Compensation Planning. Stock awards or options can affect cash flow and taxes, which may influence how a client funds the 401(k).
• Employer Stock Strategy. Clients with significant company stock may need to consider concentration risk and, in some cases, specialized distribution strategies.

Not every strategy is appropriate for every situation. An EP Wealth advisor can help you evaluate which approaches may fit your circumstances and how they interact with the rest of your financial plan.

401(k) Planning for Business Owners

Business owners have to consider a 401(k) from two perspectives: their own retirement planning and their responsibilities as a company plan sponsor. The right plan structure can help them pursue their own retirement goals while offering a benefit that strengthens the company’s ability to attract and retain employees.

EP Wealth financial advisors can help business owners compare plan options based on the structure and economics of the business, including factors such as ownership structure and employee demographics. We can also consider how the plan fits with the owner’s personal retirement goals and broader business strategy.

For some owners, 401(k) planning may also involve questions around compensation strategy, tax planning, or the timing of a future business transition. EP Wealth can coordinate those decisions with broader business planning, including succession planning and tax strategy. 

401(k) Planning FAQs

What is the difference between a traditional 401(k) and a Roth 401(k)?

Traditional 401(k) contributions are made with pre-tax dollars and taxed when withdrawn in retirement. Roth 401(k) contributions are made with after-tax dollars, and qualified withdrawals are not subject to income tax. The right choice depends on your current tax bracket, your expected bracket in retirement, and your time horizon.

Can I contribute to both a 401(k) and an IRA?

In most cases, yes. However, the deductibility of traditional IRA contributions may be limited if you or your spouse participate in an employer-sponsored retirement plan. An EP Wealth advisor can help you evaluate how contributions across accounts affect your tax situation.

What happens to my 401(k) when I change jobs?

You generally have several options: leave the funds in your former employer's plan, roll them into your new employer's plan, roll them into an IRA, or cash out. Cashing out may trigger taxes and penalties. An EP Wealth advisor can help you evaluate which option fits your circumstances.

How do catch-up contributions work?

Employees who meet certain age thresholds can contribute above the standard annual limit. The IRS sets catch-up limits for participants age 50 and older, with a higher limit available for those ages 60 through 63. These limits are adjusted periodically, and your advisor can help determine how catch-up contributions fit within your broader contribution strategy.

Are 401(k) assets protected from creditors?

Assets held in employer-sponsored 401(k) plans generally receive federal creditor protection under ERISA. There are exceptions, including certain federal tax liens and qualified domestic relations orders.

Why Choose EP Wealth for Retirement Planning

Your dream for the future is highly personal, and no two retirement planning strategies are alike. That's why EP Wealth advisors take the time to understand your full financial picture before making recommendations about your 401(k). Your advisor connects your 401(k) decisions with your tax planning and estate planning strategies and your long-term retirement goals. That integrated approach is designed to help your 401(k) stay connected to the rest of your financial picture as your life and goals evolve.

We are here to answer your questions, explain your options, and help you make informed decisions about your retirement strategy. Speak with an EP Wealth financial advisor to learn more about our 401(k) planning and retirement planning services.