Skip to content

Navegó a una página que no está disponible en español en este momento. Seleccione el enlace si desea ver otro contenido en español.

Página principal
Comienzo de ventana emergente

## Esta página solo está disponible en inglés

Selecione Cancele para permanecer en esta página o Continúe para ver nuestra página principal en español.

Cancele Continúe
Fin de ventana emergente

# 401(k) Plans

- Print

When considering a 401(k) plan for employees, keep in mind this flexible plan offering provides the highest level of employee pre-tax or Roth contributions, a wide range of employer contribution options, and an optional loan provision.

## Eligibility to Contribute

Companies of all sizes and structures can offer this type of retirement plan. Employee eligibility requirements are set at the time the plan is established.

## Maximum Annual Contribution

- Employer: Profit sharing and match: Up to the lesser of 25% of compensation or $69,000 including employee contributions for 2025.
- Employee (Salary Deferral): Up to the lesser of 100% of compensation or for a maximum of $23,000 ($30,500 if age 50 or older) for 2025.
- The total combination of employer and employee (salary deferral) contributions may not exceed $70,000 ($77,500 if age 50 or older) for 2025. Beginning in 2025, the catchup for those ages 60 to 63 increases to $11,250.

## Tax-Deductible Contributions

- Employers can deduct contributions from federal taxable income.
- Employees can make pre-tax contributions.

Your plan may allow you to allocate part or all of your employee deferral to a Roth 401(k). Roth 401(k) salary deferrals are not tax deductible but contributions and earnings have the potential to grow tax deferred and may be eligible for income tax free withdrawals if held for five years and withdrawn after age 59½.

## Taxation of Earnings and Withdrawals

Pre-tax contributions and earnings are taxed as ordinary income when withdrawn. Roth contributions are withdrawn tax-free. Roth earnings are tax-free if the withdrawal is considered a qualified distribution.

## Types of Investments

Generally a broad array of mutual funds or other investments which may vary based on the retirement platform the plan is on.

## Withdrawal Penalties

10% IRS additional tax if withdrawn before age 59½ unless exception applies.

Some exceptions:

- Separation of service in the year attaining age 55 or older.
- Death
- Disability
- Substantially equal periodic payments made over life expectancy
- Qualified military reservist
- Qualified domestic relations order due to divorce
- Up to $5,000 for qualified adoption/birth expenses

## Required Withdrawals

The age to start Required Minimum Distributions (RMDs) begins at age 73. If you are still employed by the employer sponsoring this plan, RMDs may be delayed until the year of retirement (some exceptions apply.).

## Deadline to Set Up and Fund

- 401(k) plans may be set up by tax filing deadlines plus extensions.
- Salary deferral portion of the contribution must be deducted from participants’ paychecks.
- Employer contribution may be made through the business’ tax filing due date plus extensions.

## Commissions and Fees

Vary by mutual fund family

## Want to learn more about our 401(k) plans?

Call us at 1-877-493-4727

## Make your money work

Earn more with a Business Market Rate Savings account (Member FDIC)

Learn More

Investment and Insurance Products are:

- Not Insured by the FDIC or Any Federal Government Agency
- Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate
- Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

Investment products and services are offered through WF Advisors, a trade name used by WF Clearing Services, LLC and WF Advisors Financial Network, LLC, separate registered broker-dealers and non-bank affiliates of WF & Company.

WF and Company and its Affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.

Information published by WF Bank, N.A., WF Advisors, or one of its affiliates as part of this website is published in the United States and is intended only for persons in the United States.

PM-08072026-7617273.1.1

LRC-0225

## Compare our plans

Get a side-by-side comparison of our business retirement plans.

## More resources

- Expand Employee Benefits

## Still have questions?

### Call Us

WF Advisors

Brokerage Accounts

1-877-493-4727

More contact options

Give Us Feedback