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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Small 401(K) plan

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: How many employees do you need to participate in a 401K plan?

A: One. In fact the greatest number of new 401(k) plans started now are for one person businesses. This does not mean that 401(k) plans are always best for one person businesses and it seems likely that if these small business people had full information on all of the options, they would likely have chosen a different type of retirement savings plan. This is even more likely to be true in a business that has more than one employee but only one (usually the owner) will be covered by the proposed retirement plan. In this case, a 401(k) plan is usually not the best choice.


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