How to Increase 401(k) Engagement and Improve Retirement Readiness

Offering a 401(k) plan is a great first step — but simply having a plan doesn’t guarantee employees are using it.

Many business owners are surprised to learn that low participation rates, low contribution levels, and disengaged employees can significantly reduce the effectiveness of their retirement benefit.

If your employees aren’t contributing — or are only contributing minimally — your 401(k) plan may not be working as intended.

At Top 401(k) Providers, we help employers design retirement plans that drive real engagement and long-term participation.

Here’s what may be hurting your plan — and how to fix it.

Why 401(k) Participation Matters

Higher participation benefits everyone:

• Employees build stronger retirement savings

• Employers improve retention

• Plans are more likely to pass nondiscrimination testing

• Owners can maximize their own contributions

Low participation, especially among non-highly compensated employees, can restrict how much business owners are allowed to contribute.

Signs Your 401(k) Participation Is Too Low

You may have an engagement problem if:

• Participation is below 70%

• Average employee contribution is under 5%

• Employees are only contributing enough to get the match

• You frequently struggle with nondiscrimination testing

• Employees don’t understand how the plan works

Many companies assume their plan is “fine” — until testing results or workforce feedback suggest otherwise.

Common Reasons Employees Don’t Participate

No Automatic Enrollment

If employees must opt in manually, participation rates typically drop.

Automatic enrollment dramatically increases engagement by enrolling employees at a default contribution rate unless they opt out.

-Match Formula Isn’t Incentivizing

A weak or confusing employer match may discourage participation.

For example:

• A 25% match up to 4% may not feel meaningful.

• A stronger 100% match up to 3% may encourage higher engagement.

-Employees Don’t Understand the Benefit

Many employees don’t fully understand:

• Tax advantages

• Compounding growth

• Employer matching

• Roth vs. traditional contributions

Without education, participation suffers.

-High Fees or Poor Investment Options

If your plan has:

• High expense ratios

• Limited fund choices

• Underperforming investments

Employees may lose confidence in contributing.

No Auto-Escalation Feature

Auto-escalation gradually increases employee contribution percentages annually, helping them save more without feeling the impact immediately.

Without it, employees often stay stuck at low contribution levels for years.

Strategies to Increase 401(k) Participation

-Implement Automatic Enrollment

Many plans now default employees into:

• 3%–6% contribution rates

Participation often increases dramatically with this feature.

-Add Automatic Escalation

Gradually increase contributions by 1% annually up to a target rate (e.g., 10%).

This improves long-term retirement readiness.

-Improve Employee Education

Host:

• Annual retirement planning sessions

• Onboarding education

• Open enrollment refreshers

When employees understand the benefit, they’re more likely to use it.

-Reevaluate Your Match Formula

Sometimes a small structural change in your match formula can increase contributions without significantly increasing cost.

-Benchmark Your Plan

Regular benchmarking ensures:

• Competitive fee structure

• Appropriate investment lineup

• Plan competitiveness in your industry

How Participation Impacts Business Owners

Low employee participation can:

• Limit owner contribution amounts

• Cause nondiscrimination testing failures

• Increase administrative burdens

Strategically improving engagement benefits both leadership and staff.

The Competitive Advantage of a Strong 401(k)

In today’s hiring environment, retirement benefits matter.

A well-designed 401(k) plan can:

• Attract higher-quality candidates

• Reduce turnover

• Improve employee satisfaction

• Enhance company culture

It’s not just a benefit — it’s a strategic tool.

When to Review Your 401(k) Plan

If your company is:

• Growing

• Experiencing testing challenges

• Facing low participation

• Unsure about fee competitiveness

• Unsure how your plan compares to industry benchmarks

It may be time for a professional plan review.

Final Thoughts

If your 401(k) participation rates are low, the issue likely isn’t your employees — it may be your plan design.

With the right structure, education, and features, participation can improve significantly.

At Top 401(k) Providers, we help businesses:

• Increase engagement

• Improve compliance

• Optimize match structures

• Benchmark fees

• Strengthen retirement outcomes

If you’d like a complimentary 401(k) participation review, we’re here to help.

Your retirement plan should work for your employees — and your business.

Schedule Today!

Understanding 401(k) Fiduciary Responsibility and How to Reduce Risk

Many business owners don’t realize something critical:

If you sponsor a 401(k) plan, you are likely a fiduciary.

That title carries legal responsibility — and potential liability.

At Top 401(k) Providers, we regularly meet employers who had no idea they were personally responsible for overseeing their retirement plan. Understanding fiduciary duties is essential to protecting your company and yourself.

Here’s what you need to know.

What Is a 401(k) Fiduciary?

Under ERISA (Employee Retirement Income Security Act), a fiduciary is anyone who:

• Exercises discretionary authority over a retirement plan

• Controls plan assets

• Makes decisions about investments

• Selects service providers

• Interprets plan documents

If you own a business and sponsor a 401(k), you are almost certainly acting as a fiduciary.

What Are Your Fiduciary Responsibilities?

As a 401(k) fiduciary, you must:

-Act in the Best Interest of Participants

All decisions must benefit employees — not the company.

-Monitor Investments

You must regularly review:

• Fund performance

• Fees

• Expense ratios

• Investment lineup suitability

Set-it-and-forget-it is not compliant.

-Ensure Reasonable Fees

Excessive fees are one of the most common reasons employers face lawsuits.

You are responsible for understanding:

• Recordkeeping fees

• Advisory fees

• Investment expenses

-Follow the Plan Document

Your 401(k) must operate according to its written plan rules.

-Diversify Investments

Participants must have diversified options to reduce risk exposure.

What Happens If You Fail as a Fiduciary?

Fiduciary breaches can result in:

• Department of Labor investigations

• IRS penalties

• Civil lawsuits

• Personal financial liability

Yes — fiduciaries can be personally liable for plan losses.

401(k) litigation has increased significantly in recent years, especially regarding excessive fees and lack of investment monitoring.

Common Fiduciary Mistakes Employers Make

Many business owners unintentionally:

• Never benchmark plan fees

• Fail to document investment reviews

• Use outdated investment menus

• Don’t understand revenue sharing arrangements

• Assume their advisor handles everything

Even if you work with a provider, the responsibility may still rest with you unless properly structured.

How to Reduce Fiduciary Risk

There are strategic ways to limit liability exposure.

-Hire a 3(21) or 3(38) Fiduciary Advisor

• A 3(21) advisor provides guidance, but you retain decision authority.

• A 3(38) advisor assumes investment discretion and greater responsibility.

-Document Everything

Maintain:

• Investment committee meeting notes

• Fee benchmarking reports

• Investment performance reviews

-Conduct Regular Plan Reviews

Annual reviews are essential — quarterly is even better.

-Consider Fiduciary Liability Insurance

This can help protect personal assets in the event of litigation.

Why Fiduciary Oversight Is Increasing

The Department of Labor has intensified oversight of:

• Excessive plan fees

• Revenue sharing conflicts

• Inadequate investment monitoring

• Conflicts of interest

With retirement balances growing nationwide, 401(k) plans are under more scrutiny than ever.

The Hidden Risk: “I Didn’t Know”

Unfortunately, “I didn’t know” is not a legal defense.

Many employers assume their payroll company or recordkeeper handles compliance — but fiduciary responsibility typically remains with the plan sponsor.

Understanding your role is the first step toward protecting your business.

Why Work with a Fiduciary-Focused 401(k) Advisor?

A properly structured 401(k) partnership should:

• Reduce employer liability

• Ensure fee transparency

• Provide documented investment oversight

• Improve plan performance

• Strengthen employee retirement outcomes

At Top 401(k) Providers, we help employers:

• Understand their fiduciary role

• Benchmark plan costs

• Document oversight properly

• Implement risk-reducing plan structures

• Stay compliant with evolving regulations

Final Thoughts

If you sponsor a 401(k), you are likely a fiduciary — whether you realized it or not.

The good news? With proper structure, documentation, and oversight, fiduciary responsibility can be managed effectively.

Ignoring it is the real risk.

If you’d like a fiduciary review of your current 401(k) plan, Top 401(k) Providers can help you identify vulnerabilities and build a more compliant, transparent retirement plan structure.

Protect your business. Protect your employees. Protect your future.

A Strategic Guide for Employers from Top 401(k) Providers

One of the most common questions business owners ask when setting up or reviewing a retirement plan is:

“How much should we match in our 401(k)?”

Offering a company match can help attract and retain top talent — but it must also align with your company’s financial goals and long-term sustainability.

At Top 401(k) Providers, we help businesses design strategic 401(k) plans that balance competitiveness, compliance, and cost control. Here’s what you need to consider when determining your company match.

Why Offer a 401(k) Match?

A company match:

• Encourages employee participation

• Increases retirement readiness

• Improves recruitment and retention

• Enhances company culture

• Offers tax-deductible contributions

In today’s competitive hiring environment, retirement benefits often influence candidate decisions.

Common 401(k) Match Formulas

There is no universal standard, but here are the most common structures:

-100% Match on the First 3%

Employer matches dollar-for-dollar up to 3% of employee compensation.

Example:
Employee earns $80,000 and contributes 3% ($2,400).
Employer contributes $2,400.

-50% Match on the First 6%

Employer matches 50 cents per dollar up to 6% of compensation.

Example:
Employee earns $80,000 and contributes 6% ($4,800).
Employer contributes $2,400.

-Tiered Safe Harbor Match

Common Safe Harbor formula:

• 100% match on first 3%

• 50% match on next 2%

This structure automatically satisfies IRS nondiscrimination testing.

-Non-Elective Contribution

Employer contributes a fixed percentage (typically 3%) to all eligible employees, regardless of participation.

How Much Do Most Companies Match?

According to industry benchmarks:

• The average employer match ranges between 3% and 6% of compensation.

• Many small-to-mid-sized businesses match around 4%.

However, averages shouldn’t dictate your decision — strategy should.

Factors to Consider When Setting Your Match

-Company Budget

Your match must be sustainable long-term. Overcommitting can create financial strain.

-Workforce Demographics

If you have:

• Younger employees → Higher match may encourage participation

• Highly compensated employees → Safe Harbor may be strategic

-Recruitment Goals

If competing for skilled professionals, a stronger match may improve your offer package.

-Owner Contribution Goals

If leadership wants to maximize their own retirement contributions, Safe Harbor structures may be beneficial.

-Plan Testing Requirements

Certain match formulas help avoid nondiscrimination testing failures.

Is a Bigger Match Always Better?

Not necessarily.

A higher match:

• Increases cost

• May not significantly improve participation beyond a certain point

• Must align with cash flow

Sometimes, adjusting vesting schedules or adding profit-sharing contributions can be more strategic than simply increasing the match percentage.

Understanding Vesting Schedules

Employers may apply a vesting schedule to matching contributions.

Common options:

• Immediate vesting

• 3-year cliff vesting

• 6-year graded vesting

Vesting schedules can improve retention while managing long-term costs.

Tax Benefits for Employers

Employer contributions are:

• Tax-deductible

• Not subject to payroll taxes

• Potentially eligible for startup tax credits (for new plans)

Strategically structured plans may also provide retirement tax advantages for business owners.

Designing a Competitive Yet Sustainable 401(k)

The right match formula should:

• Align with company growth goals

• Be financially predictable

• Encourage employee participation

• Support leadership retirement objectives

• Ensure regulatory compliance

There is no one-size-fits-all solution.

Why Work with a 401(k) Advisor?

Choosing the right match structure affects:

• Cash flow

• Compliance

• Employee satisfaction

• Owner retirement strategy

At Top 401(k) Providers, we help employers:

• Benchmark their plan

• Evaluate match competitiveness

• Analyze long-term cost projections

• Ensure IRS compliance

• Optimize plan design

Final Thoughts

So, how much should your company match in a 401(k)?

For most companies, 3%–6% is common — but the best answer depends on your business goals, workforce, and financial strategy.

A well-designed 401(k) match isn’t just an expense — it’s an investment in your company’s future.

Schedule an Appointment Today! 

Choosing the right retirement plan is one of the most impactful decisions you’ll make for your business. A well-designed 401(k) can help attract and retain talent, improve employee financial wellness, and provide meaningful tax advantages for owners.

But when it comes time to set up (or review) your plan, many employers get stuck on one key question:

Should we offer a Safe Harbor 401(k) or a Traditional 401(k)?

Both options can be excellent — but they work very differently. In this guide, we’ll break down the pros, cons, costs, and compliance considerations of each, so you can decide which structure fits your company best.

What Is a Traditional 401(k)?

A Traditional 401(k) gives employers flexibility in how much they contribute (if anything at all). Employees can defer part of their paycheck into the plan, and employers may choose to add matching or profit-sharing contributions.

However, Traditional 401(k) plans must pass annual nondiscrimination testing to ensure the plan benefits employees fairly — not just owners and highly compensated employees (HCEs).

Key Features of a Traditional 401(k)

• Employer contributions are optional

• Annual nondiscrimination testing is required

• Highly compensated employees may face contribution limits if tests fail

• More flexibility in year-to-year employer costs

• Works well for companies with strong employee participation

Pros

• Lower required employer contributions

• Greater flexibility in matching or profit-sharing

• Good fit for companies with balanced participation across income levels

Cons

• Annual testing can be complex

• Owners may be restricted from maxing out contributions

• Potential refunds to highly compensated employees if tests fail

In short: Traditional 401(k)s offer flexibility — but come with compliance uncertainty.

What Is a Safe Harbor 401(k)?

A Safe Harbor 401(k) is designed to automatically pass nondiscrimination testing by requiring employers to make a guaranteed contribution to employees each year.

In exchange, business owners and highly compensated employees are typically allowed to contribute the maximum IRS limit without worrying about testing failures.

Key Features of a Safe Harbor 401(k)

• Mandatory employer contribution (match or nonelective)

• Automatically satisfies nondiscrimination requirements

• Allows owners and HCEs to maximize contributions

• Predictable annual employer cost

• Often increases employee participation

Common Safe Harbor contribution structures include:

• A match (for example, 100% of the first 3% deferred, plus 50% of the next 2%)

• A flat nonelective contribution (typically 3% of pay to all eligible employees)

Pros

• No annual nondiscrimination testing

• Owners can usually max out contributions

• Encourages higher employee participation

• Simpler compliance and administration

Cons

• Employer contributions are required every year

• Slightly higher ongoing costs for the company

• Less flexibility to skip contributions during lean years

In short: Safe Harbor plans trade flexibility for simplicity and higher owner contribution potential.

Side-by-Side Comparison

Here’s a quick way to think about the difference:

Traditional 401(k):
More flexible, lower guaranteed costs — but subject to annual testing and possible contribution limits for owners.

Safe Harbor 401(k):
Higher required employer contributions — but predictable compliance and the ability for owners to maximize savings.

Which Option Is Better for Your Company?

There’s no one-size-fits-all answer. The right choice depends on your workforce, financial goals, and ownership structure.

A Safe Harbor 401(k) may be a better fit if:

• Owners want to contribute the maximum each year

• Your plan struggles with nondiscrimination testing

• Employee participation is low

• You prefer predictable compliance

• You want a simpler administrative experience

A Traditional 401(k) may make more sense if:

• Your employees already participate at healthy levels

• You want flexibility with employer contributions

• Your budget varies year to year

• Owners don’t need to max out contributions

• You’re comfortable managing annual testing

Many businesses also transition from Traditional to Safe Harbor as they grow — especially once owners start hitting contribution limits.

Don’t Forget: Your 401(k) Should Be Reviewed Annually

Whichever structure you choose, your plan shouldn’t stay on autopilot.

As your company evolves, so do your needs. Changes in headcount, compensation, profitability, and employee demographics can all impact whether your current 401(k) design is still working for you.

Regular reviews help ensure:

• Fees remain competitive

• Participation stays strong

• Compliance risks are minimized

• Owners are maximizing tax-advantaged savings

• Employees are supported with meaningful retirement benefits

Get Expert Guidance Before You Decide

Choosing between a Safe Harbor and Traditional 401(k) isn’t just a technical decision — it’s a strategic one that affects your business, your employees, and your personal retirement goals.

That’s why many employers work with Top 401(k) Providers for personalized plan design, ongoing support, and clear guidance. A knowledgeable advisor can analyze your workforce, compare scenarios, and help you implement a plan that aligns with both compliance requirements and long-term objectives.

Final Thoughts

Safe Harbor and Traditional 401(k) plans each have distinct advantages. The “better” option comes down to what matters most to your company: flexibility, simplicity, contribution limits, or predictability.

By understanding how each plan works — and reviewing your strategy regularly — you can offer a retirement benefit that supports your employees while helping your business thrive.

If you’re considering starting a 401(k) or reevaluating your current plan, now is the perfect time to explore your options and make sure your retirement strategy is working as hard as you are. Schedule an Appointment Today!

The retirement landscape continues to evolve, and SECURE 2.0 remains one of the most significant updates to 401(k) plans in recent years. While many of its provisions were introduced gradually, 2026 marks an important year where several changes directly affect how employees save for retirement.

If you participate in a 401(k) plan, understanding these updates can help you take full advantage of new opportunities — and avoid potential confusion.

Here’s what every 401(k) participant should know about the SECURE 2.0 changes in 2026.

What Is SECURE 2.0?

SECURE 2.0 is a federal law designed to expand access to retirement plans, encourage higher savings rates, and modernize how Americans prepare for retirement.

Its goals include:

• Making it easier to save through workplace plans

• Increasing participation and contribution rates

• Providing more flexibility for unexpected financial needs

• Enhancing long-term retirement security

Many of these changes directly impact employees, not just employers.

Key SECURE 2.0 Changes That Affect 401(k) Participants in 2026

1. Automatic Enrollment Is Becoming More Common

Under SECURE 2.0, many newly established 401(k) plans are required to automatically enroll eligible employees.

What this means for participants:

• You may be automatically enrolled when eligible

• Contributions typically start at a default percentage

• Automatic annual increases may apply unless you opt out

Automatic enrollment is designed to help participants start saving earlier — even if retirement feels far away.

2. Higher Catch-Up Contributions for Older Workers

SECURE 2.0 expands catch-up contribution opportunities for employees nearing retirement age.

Why this matters:

• Participants closer to retirement may be able to save more each year

• Catch-up contributions can help close retirement savings gaps

• These changes support late-career retirement planning

If you’re approaching retirement, reviewing your contribution strategy is more important than ever.

3. Employer Matching on Student Loan Payments

One of the most talked-about SECURE 2.0 features allows employers to offer 401(k) matching contributions based on qualified student loan payments.

For participants:

• You may be able to receive employer match even if student loans limit your ability to contribute

• This helps younger workers build retirement savings sooner

• Participation rules vary by employer plan

If you’re paying off student debt, this change could significantly impact your long-term savings.

4. Emergency Savings Options Within Retirement Plans

SECURE 2.0 encourages plans to offer emergency savings features linked to 401(k) accounts.

Potential benefits include:

• Access to short-term savings for unexpected expenses

• Reduced need to tap retirement funds prematurely

• Greater financial flexibility without long-term penalties

Not every plan will offer this feature, but availability is expected to increase.

5. Roth Contributions Are Playing a Bigger Role

Roth options continue to grow under SECURE 2.0, offering participants more tax flexibility.

What participants should know:

• Roth contributions are taxed now but may be tax-free later

• Some employer contributions may be designated as Roth

• Choosing between Roth and traditional contributions depends on your tax situation

Understanding your tax strategy is key when deciding how to contribute.

How These Changes Can Impact Your Retirement Strategy

SECURE 2.0 is designed to help participants:

• Start saving earlier

• Save more consistently

• Build retirement confidence over time

However, more options can also mean more decisions — and that’s where guidance matters.

Questions to ask yourself:

• Am I contributing enough to maximize employer matching?

• Should I increase my contributions this year?

• Does a Roth option make sense for me?

• How will these changes affect my long-term goals?

Why Staying Informed Matters

Even small adjustments to your 401(k) strategy can have a meaningful impact over time. SECURE 2.0 makes it easier to save, but only if participants understand how their plan works.

Taking time to review your plan features and contribution elections ensures you’re making the most of what’s available.

Final Thoughts

The SECURE 2.0 changes in 2026 represent a continued shift toward making retirement savings more accessible, flexible, and effective. Whether you’re early in your career or nearing retirement, these updates may create new opportunities to strengthen your financial future.

If you have questions about how these changes apply to your specific 401(k) plan, speaking with a retirement professional can help you navigate your options with confidence.

Schedule an Appointment Here!

The start of the year is a critical time for employers sponsoring a 401(k) plan. While many businesses focus on payroll resets, benefits renewals, and year-end reporting, 401(k) compliance issues often surface quietly in January and February — and can create serious problems if left unaddressed.

Understanding the most common early-year 401(k) compliance challenges can help employers avoid costly corrections, IRS penalties, and fiduciary risk later in the year.

Why Early-Year 401(k) Compliance Matters

Many compliance issues originate months earlier but aren’t discovered until the new plan year begins. Changes in employee status, payroll systems, contribution limits, and plan documents can all trigger errors if not handled correctly.

Catching and correcting issues early often means simpler fixes and lower costs. Waiting too long can lead to missed deadlines, failed testing, or formal correction programs.

Late or Incorrect Employee Contributions

One of the most common compliance problems employers face early in the year is late or incorrect employee deferral deposits.

Employee 401(k) contributions must be deposited as soon as administratively possible after each payroll. Delays — even unintentional ones — can be considered a prohibited transaction and may require corrective contributions and reporting.

Early in the year, contribution issues often arise due to payroll system changes, new vendors, or internal staffing transitions.

Missed or Incorrect Employer Match Contributions

Employer matching contributions are another frequent trouble spot.

Errors can occur when:

• Payroll data is incomplete or inaccurate

• Eligibility rules are misunderstood

• Compensation definitions are applied incorrectly

• Employees change contribution rates late in the year

If employer contributions don’t align with the plan document, corrections may be required, including retroactive contributions and earnings adjustments.

Eligibility and Enrollment Errors

Eligibility tracking mistakes are especially common in January.

New hires who should have been enrolled may be overlooked, or employees who met eligibility requirements late in the prior year may not be enrolled on time. In plans with automatic enrollment, missed deferrals can quickly turn into larger compliance issues.

Employers should review eligibility reports early to confirm that all eligible employees were offered participation at the correct time.

Incorrect Compensation Definitions

Many compliance issues stem from using the wrong definition of compensation.

Some plans define compensation as W-2 wages, while others exclude bonuses, commissions, or overtime. Early-year payroll setup errors can cause contributions to be calculated incorrectly if compensation definitions aren’t aligned with the plan document.

This is especially important when payroll systems are updated at the beginning of the year.

Plan Document and Operational Misalignment

A common but often overlooked issue is operating the plan in a way that doesn’t match the plan document.

This can include:

• Applying eligibility rules incorrectly

• Using outdated match formulas

• Failing to follow auto-enrollment or auto-escalation provisions

• Ignoring recent plan amendments

Operating outside the plan document can create fiduciary exposure even if the intent was not malicious.

Testing and Safe Harbor Misunderstandings

Employers sometimes assume their plan is exempt from testing when it is not.

Safe Harbor plans must meet specific requirements every year, including proper notices and contribution formulas. Missing a notice or altering contributions without proper amendments can jeopardize Safe Harbor status and lead to failed nondiscrimination testing.

Early review helps ensure the plan remains compliant before testing season begins.

Required Notices and Deadlines

Several important notices and filings occur early in the year, including:

• Safe Harbor notices

• Participant disclosures

• Preparation for Form 5500 reporting

Missing or delaying required notices can create compliance gaps that are difficult to correct retroactively.

How Employers Can Reduce Compliance Risk

Employers can minimize 401(k) compliance issues by conducting an early-year plan review. This includes reconciling payroll data, reviewing eligibility and contribution reports, confirming plan document alignment, and addressing any discrepancies promptly.

Working with an experienced 401(k) advisor can help employers identify risks early, implement corrections properly, and stay ahead of evolving regulatory requirements.

Bottom Line

Early-year 401(k) compliance issues are common — but they are also preventable. Employers who take the time to review their plan operations in January and February are better positioned to avoid costly corrections and maintain a compliant, well-run retirement plan throughout the year.

Proactive oversight today can protect both the employer and plan participants long before compliance issues turn into major problems. Schedule an appointment with one of our advisors, here!

Saving for retirement through a 401(k) is one of the smartest financial decisions you can make—but many employees unknowingly make mistakes that can cost them thousands of dollars over time. Understanding these common pitfalls and knowing how to avoid them can help you maximize your retirement savings and ensure a comfortable future.

1. Not Contributing Enough

One of the biggest mistakes is underfunding your 401(k). Many employees only contribute the minimum or delay enrolling, missing out on years of compounding growth.

Tip: Try to contribute at least enough to get the full employer match, if available. Over time, even small increases in your contribution percentage can make a huge difference.

2. Ignoring the Employer Match

Employer matches are essentially free money, yet some employees don’t take full advantage. Failing to contribute enough to capture the full match is like leaving money on the table.

Tip: Check your plan details and ensure you contribute enough to receive the full employer match every year.

3. Overlooking Fees

401(k) plans may charge administrative or investment fees, which can quietly reduce your savings over decades. High fees can erode returns and impact your retirement balance.

Tip: Review the fee structure of your plan and choose low-cost investment options when possible. Small differences in fees can add up to thousands over time.

4. Failing to Rebalance

Market fluctuations can throw your investment allocations out of balance, exposing you to more risk than intended or reducing growth potential. Many employees forget to review and adjust their portfolio regularly.

Tip: Rebalance your 401(k) at least once or twice a year to maintain your target investment mix.

5. Cashing Out Early

Leaving a job and cashing out your 401(k) may seem convenient, but it can trigger tax penalties and lost growth opportunities. Early withdrawals can significantly reduce your retirement nest egg.

Tip: Consider rolling over your 401(k) to a new employer’s plan or an IRA instead of cashing out. This keeps your retirement savings intact and growing.

How a 401(k) Advisor Can Help

Working with a 401(k) advisor ensures you:

• Understand your plan’s options and rules.

• Avoid common mistakes that could cost you money.

• Make strategic choices for your contributions, investments, and withdrawals.

Final Thoughts

Maximizing your 401(k) takes more than just enrolling—it requires smart contributions, regular reviews, and avoiding common pitfalls. With the right guidance, you can make your 401(k) work harder for you and secure a more comfortable retirement.

Ready to optimize your 401(k)? Contact Top 401(k) Advisors today to speak with an expert who can help you avoid these mistakes and grow your retirement savings.

In today’s job market, a competitive benefits package is no longer optional—it’s essential. Your company’s 401(k) plan plays a major role in attracting and retaining top talent, yet many employers don’t realize their plan may be falling behind industry standards.

As the new year begins, now is the ideal time to evaluate whether your 401(k) plan is still competitive and aligned with employee expectations.

Why a Competitive 401(k) Plan Matters

Employees are paying closer attention to retirement benefits than ever before. A strong 401(k) plan can:

• Improve employee retention

• Enhance recruitment efforts

• Support long-term financial wellness

• Demonstrate employer commitment to employees’ futures

If your plan hasn’t been reviewed recently, it may be missing key features that employees value.

Key Signs Your 401(k) Plan May Be Falling Behind

1. Employer Match Isn’t Competitive

Employer matching contributions are one of the most important factors employees consider. Review:

• Match percentage and limits

• Vesting schedules

• How your match compares to similar employers

A competitive match can significantly impact participation and satisfaction.

2. Limited Investment Options

Employees expect flexibility and transparency. Plans with outdated or overly complex investment lineups may discourage participation.

Consider whether your plan offers:

• A well-diversified investment menu

• Target-date funds

• Low-cost index options

A streamlined, high-quality investment lineup helps employees make confident decisions.

3. High Fees and Administrative Costs

Excessive fees can erode retirement savings and expose employers to fiduciary risk.

Employers should regularly evaluate:

• Investment expense ratios

• Recordkeeping and administrative fees

• Fee transparency for participants

Competitive 401(k) plans prioritize cost efficiency and clarity.

4. Low Employee Participation or Engagement

If participation rates are low, your plan may not be meeting employee needs.

Consider strategies such as:

• Automatic enrollment

• Automatic escalation

• Ongoing employee education

Engaged employees are more likely to contribute consistently and value their benefits.

5. Lack of Financial Wellness Tools

Modern 401(k) plans often include tools that support broader financial health, such as:

• Retirement readiness calculators

• Educational resources

• Personalized guidance

These features can significantly enhance employee satisfaction and outcomes.

How Often Should Employers Review Their 401(k) Plan?

Best practice is to review your 401(k) plan at least annually, or whenever:

• Your workforce changes significantly

• Regulations are updated

• Participation or satisfaction declines

A regular review helps ensure compliance, competitiveness, and alignment with business goals.

Start the Year with a Competitive Edge

A competitive 401(k) plan benefits both employers and employees. By reviewing your plan at the start of the year, you can identify opportunities to improve outcomes, control costs, and strengthen your overall benefits strategy.

If you’re unsure whether your 401(k) plan is keeping pace, working with an experienced retirement plan advisor can provide clarity and confidence.

The new year is the perfect time to ensure your 401(k) plan remains a powerful tool for employee success and business growth.

Book an Appointment Today! 

As we approach the new year, employers have an important opportunity to review and optimize their 401(k) plans. Maximizing retirement benefits not only helps employees save for the future but also enhances recruitment, retention, and overall satisfaction.

This guide outlines key strategies for employers to prepare their plans for 2026, ensuring compliance, efficiency, and maximum value for employees.

Review Your 401(k) Plan Design

Evaluate Employer Matching and Contributions

Employer matching and profit-sharing can significantly impact employees’ retirement savings. Consider:

• Adjusting matching formulas to encourage participation

• Offering profit-sharing contributions for high-performing employees

• Reviewing contribution limits and ensuring employees are aware of them

A thoughtful approach to plan design can maximize employee savings and engagement.

Assess Eligibility Rules

Review eligibility requirements to ensure they align with business goals and regulatory standards:

• Minimum service periods for participation

• Age requirements

• Vesting schedules

Clear, well-structured eligibility rules can improve participation and satisfaction.

Conduct Investment and Fee Reviews

Evaluate Fund Performance

Top providers recommend regularly reviewing investment options:

• Compare fund returns to benchmarks

• Monitor risk-adjusted performance

• Ensure target-date and diversified funds meet employees’ needs

Optimizing the investment lineup helps employees achieve long-term retirement goals.

Review Administrative and Investment Fees

High fees can erode retirement savings over time. Q4 is the perfect time to:

• Examine recordkeeping and administrative costs

• Review investment management expenses

• Consider cost-effective alternatives without sacrificing quality

Keeping fees competitive benefits both employees and fiduciaries.

Focus on Employee Education and Engagement

Communicate Contribution Limits and Deadlines

Ensure employees understand:

• Maximum 401(k) deferral amounts for 2026

• Catch-up contributions for employees over 50

• Year-end contribution strategies

Clear communication encourages participation and helps employees make informed choices.

Provide Resources for Investment Decisions

Offering educational tools, workshops, and personalized counseling allows employees to:

• Understand available funds

• Evaluate risk and diversification

• Make confident retirement decisions

Engaged employees are more likely to take full advantage of their benefits.

Ensure Compliance and Fiduciary Preparedness

Conduct Required Testing

Top providers help employers perform necessary compliance checks:

• ADP/ACP nondiscrimination tests

• Top-heavy testing

• Eligibility and coverage verification

Early preparation reduces risk and avoids last-minute corrective actions.

Maintain Documentation

Proper recordkeeping demonstrates fiduciary oversight and compliance:

• Document committee decisions

• Track investment selections and plan changes

• Keep records of employee communications

Thorough documentation protects employers and supports regulatory adherence.

Plan for 2026 Strategic Improvements

Adjust Plan Offerings

Consider introducing new features or perks to enhance retirement benefits:

• Health savings account integration

• Financial wellness programs

• Additional voluntary contributions or matching strategies

These improvements can make your plan more attractive to current and prospective employees.

Stay Informed About Regulatory Changes

IRS and Department of Labor guidance can impact contribution limits, plan design, and compliance requirements. Staying updated ensures your plan is aligned with 2026 regulations.

Partner With a Trusted 401(k) Provider

Working with a knowledgeable provider ensures your plan is optimized, compliant, and designed for maximum employee benefit. Providers can assist with:

• Year-end reviews and adjustments

• Investment optimization

• Employee education and engagement

• Strategic planning for the new year

By partnering with experts, employers set themselves and their employees up for long-term retirement success.

Take Action Now

2026 is just around the corner. Reviewing your plan, educating employees, and implementing strategic improvements today can make a lasting difference in retirement outcomes.

Schedule a consultation with a trusted 401(k) provider to ensure your plan is ready to maximize benefits for both your employees and your business in 2026.

Fees, Fiduciary Support, and Participant Experience

Choosing the right 401(k) provider is one of the most important financial decisions an employer can make. As we move into 2026, expectations for retirement plans are higher than ever—from fee transparency and fiduciary protection to technology and employee engagement.

If you’re evaluating your current plan or considering a new provider, here’s what truly separates a top-tier 401(k) provider from the rest.

Why Choosing the Right 401(k) Provider Matters

A 401(k) plan is more than a benefit—it’s a long-term commitment to your employees’ financial future and your company’s compliance responsibilities.

The right provider can:

• Reduce fiduciary risk

• Improve employee participation and retirement readiness

• Lower overall plan costs

• Save employers time through better support and administration

The wrong provider can lead to hidden fees, compliance issues, and disengaged employees.

Transparent and Reasonable 401(k) Fees

Clear Fee Disclosure (No Surprises)

One of the biggest red flags in a 401(k) plan is unclear or layered fees. Top 401(k) providers prioritize transparency, ensuring employers understand:

• Administrative fees

• Investment expense ratios

• Advisor or fiduciary fees

Everything should be clearly disclosed—without confusing language or buried costs.

Value Over “Cheapest Option”

Low fees matter, but the cheapest plan isn’t always the best plan. A quality provider balances cost with services like fiduciary oversight, employee education, and compliance support. Paying slightly more for the right structure can save significant money—and risk—over time.

Strong Fiduciary Support and Compliance Expertise

ERISA Fiduciary Protection

A top 401(k) provider helps employers meet their ERISA responsibilities and often offers:

• 3(21) or 3(38) fiduciary services

• Investment oversight and monitoring

• Documentation to support fiduciary decisions

This protection is critical as regulations and litigation risks continue to increase.

Proactive Compliance Guidance

Rather than reacting to problems, great providers help prevent them. This includes:

• Ongoing plan reviews

• Support with nondiscrimination testing

• Help navigating regulatory changes

Compliance should feel supported—not stressful.

A Better Experience for Plan Participants

Employee Education That Actually Works

Top providers understand that a 401(k) only succeeds if employees use it. Look for providers that offer:

• One-on-one retirement guidance

• Educational workshops or webinars

• Easy-to-understand resources

When employees feel confident, participation and contribution rates rise.

User-Friendly Technology and Tools

Modern employees expect modern tools. A strong 401(k) provider offers:

• Intuitive online dashboards

• Mobile access

• Simple enrollment and contribution changes

Ease of use plays a major role in long-term engagement.

Personalized Service and Ongoing Support

Dedicated Plan Support

Employers should never feel like just another account number. Top 401(k) providers offer:

• Dedicated plan contacts

• Fast response times

• Clear communication

This level of service is especially valuable during audits, employee transitions, or plan changes.

Strategic Plan Design Assistance

The best providers go beyond administration by helping employers:

• Design competitive employer matches

• Improve participation rates

• Align the plan with business goals

A well-designed plan benefits both employees and the company.

How to Evaluate Your Current 401(k) Provider

Ask yourself:

• Do we fully understand our fees?

• Are we confident in our fiduciary protection?

• Are employees engaged with the plan?

• Do we receive proactive guidance and support?

If the answer to any of these is “no,” it may be time for a review.

The Advantage of Working With an Independent 401(k) Advisory Firm

One of the most common concerns employers have when reviewing their 401(k) plan is the fear of disruption. Many assume that working with a new advisor automatically means switching providers—but that isn’t always the case.

As an independent 401(k) advisory firm, we are not tied to any single recordkeeper, investment platform, or product provider. That independence allows us to work with virtually any 401(k) provider, giving employers flexibility and options—without unnecessary changes.

No Provider Change Required

If your current 401(k) provider is a good fit operationally, there may be no need to switch. Instead, an independent advisor can:

• Evaluate your existing plan structure

• Review fees and investment lineups

• Enhance fiduciary oversight and documentation

• Improve employee education and engagement

All while keeping your current provider in place.

Unbiased Advice in Your Best Interest

Because independent firms are not incentivized to promote one provider over another, recommendations are based solely on what’s best for your plan and your employees. This results in:

• Objective plan evaluations

• Transparent fee analysis

• Solutions tailored to your company’s goals—not a sales quota

Flexibility Now and in the Future

Independence also means flexibility as your business grows. If your needs change over time, you’re not locked into a single provider ecosystem. Instead, you have the freedom to evolve your plan—on your timeline, not someone else’s.

Choosing a 401(k) Provider for 2026 and Beyond

A top 401(k) provider doesn’t just offer a plan—they offer partnership, protection, and peace of mind. As retirement planning continues to evolve, employers need providers who are transparent, proactive, and focused on both compliance and employee success.

If you’re unsure whether your current plan measures up, a professional 401(k) review can help identify opportunities to improve outcomes for both your business and your employees. Schedule a complementary review today! 

As 2025 comes to a close, it’s the perfect time to review your 401(k) and make strategic adjustments for 2026. Whether you’re a seasoned investor or just getting started, taking proactive steps now can help maximize your retirement savings, optimize your tax benefits, and ensure your investments align with your long-term goals.

Here are five 401(k) strategies to start planning today.

1. Maximize Your Contributions

Know the 2026 Contribution Limits

For 2026, the IRS has increased the 401(k) contribution limits. Individuals under 50 can contribute up to $23,000, while those 50 and older can make catch-up contributions up to $30,500. Review your current contributions and consider increasing them to take full advantage of these limits.

Take Advantage of Employer Matching

If your employer offers a matching contribution, make sure you’re contributing enough to receive the full match. Employer matches are essentially free money that can significantly boost your retirement savings over time.

2. Review and Rebalance Your Investment Allocation

Assess Your Risk Tolerance

Your investment allocation should reflect your age, retirement timeline, and risk tolerance. If your current allocation feels too conservative or too aggressive, now is the time to adjust.

Rebalance Your Portfolio

Market fluctuations can shift your asset allocation over time. Rebalancing ensures your portfolio stays aligned with your goals and helps manage risk effectively.

3. Consider Roth vs. Traditional 401(k) Options

Understand Tax Implications

A Roth 401(k) allows you to pay taxes now and withdraw funds tax-free in retirement, while a Traditional 401(k) offers tax-deferred growth. Evaluate which option fits your current tax situation and retirement goals.

Split Contributions Strategically

Some investors benefit from splitting contributions between Roth and Traditional accounts, diversifying their tax exposure in retirement.

4. Plan for Life Changes

Adjust for Career or Family Events

Marriage, children, job changes, or significant income changes can affect your contribution strategy. Update your 401(k) contributions to reflect your current financial situation and long-term goals.

Update Beneficiaries

Life changes may also require updating your beneficiary designations to ensure your retirement savings are distributed according to your wishes.

5. Minimize Fees and Optimize Investments

Review Plan Fees

401(k) plans often include management or administrative fees. Reviewing your plan’s fees and choosing low-cost investment options can improve your long-term returns.

Explore Diversification Opportunities

Consider diversifying your 401(k) investments across stocks, bonds, and target-date funds. A well-diversified portfolio can help manage risk and support growth in varying market conditions.

Final Thoughts

Starting your 401(k) planning for 2026 now can make a big difference in your retirement savings. By maximizing contributions, rebalancing your portfolio, considering Roth vs. Traditional options, planning for life changes, and minimizing fees, you can set yourself up for a stronger financial future.

If you need personalized guidance, contact our team at Cornerstone Portfolios to review your 401(k) strategy and ensure your retirement plan is on track for 2026 and beyond.

As the year comes to a close, employers face critical deadlines and responsibilities related to their 401(k) plans. From ensuring compliance to maximizing employee contributions, year-end planning is essential for both fiduciary protection and employee satisfaction.

Top 401(k) providers emphasize a proactive approach to year-end planning, helping employers navigate tasks efficiently and confidently. Here’s how the experts prepare companies for a smooth year-end.

Conduct a Comprehensive Plan Review

Check Contributions and Participation

Top providers start with a thorough review of employee and employer contributions:

• Ensure employees are maximizing their deferrals within IRS limits

• Confirm employer matching contributions are accurate

• Identify employees who may need reminders or guidance

Reviewing contributions early helps avoid surprises and ensures employees can take full advantage of their retirement savings opportunities.

Evaluate Investment Options

Providers also review plan investment menus for performance and suitability:

• Compare fund performance against benchmarks

• Assess target-date funds and diversified options

• Identify underperforming or high-fee investments

A well-reviewed investment lineup supports employees in meeting their retirement goals.

Ensure Compliance and Fiduciary Oversight

Conduct Year-End Testing

Compliance testing is a key focus at year-end. Top 401(k) providers guide employers through:

• Nondiscrimination testing (ADP/ACP)

• Top-heavy testing

• Eligibility and coverage verifications

Early identification of potential compliance issues allows time for corrective action, reducing penalties and administrative headaches.

Maintain Proper Documentation

Providers emphasize maintaining thorough records of:

• Investment committee decisions

• Plan design updates

• Employee communications

Proper documentation protects fiduciaries and demonstrates adherence to ERISA requirements.

Optimize Communication With Employees

Remind Employees About Contribution Limits

Employers often receive support from providers in communicating:

• Maximum 401(k) deferral amounts

• Catch-up contributions for those over 50

• Deadlines for making adjustments before year-end

Clear communication ensures employees maximize their benefits and avoid missed opportunities.

Provide Education on Investments

Providers also help educate employees about:

• Fund options and performance

• Risk diversification

• Resources like retirement calculators or one-on-one counseling

Education increases engagement and helps employees make informed decisions about their retirement.

Review Fees and Expenses

Examine Administrative and Investment Costs

High fees can reduce retirement savings over time. Top 401(k) providers help employers:

• Compare recordkeeping and administrative fees to industry benchmarks

• Review investment management costs

• Explore opportunities for cost savings

This review ensures the plan remains cost-effective and aligns with fiduciary responsibilities.

Make Adjustments Before Year-End

If fees are high or services can be improved, providers advise on changes that can be implemented immediately, maximizing benefits for both employees and the company.

Plan Ahead for the Next Year

Consider Plan Design Changes

Providers encourage employers to assess:

• Matching formulas

• Profit-sharing contributions

• Eligibility requirements

Making design changes at year-end ensures a smooth implementation for the next plan year.

Stay Informed About Regulatory Updates

Top providers keep employers updated on:

• IRS contribution limits

• DOL guidance

• Plan design best practices

This proactive approach reduces risk and positions the plan for success in the coming year.

Partner With a Trusted 401(k) Provider

Working with a knowledgeable provider ensures year-end processes are handled efficiently and accurately. Providers help employers:

• Conduct comprehensive plan reviews

• Optimize plan design and investment options

• Maintain compliance and fiduciary oversight

• Communicate effectively with employees

By partnering with experts, employers can enter the new year confident that their 401(k) plan is on track.

Take Action Today

Year-end is a critical time for 401(k) plan success. By reviewing contributions, investments, compliance, fees, and communication strategies, employers can protect themselves, empower employees, and maximize the value of their retirement plan.

Schedule a consultation with a trusted 401(k) provider today to ensure your plan is fully prepared for 2026 and beyond.