401(k) Profit Sharing Plans

Strategic 401(k) Plan Design

We partner with business owners (plan sponsors) who are committed to strengthening their employee benefits and supporting long-term financial security for their teams.

Our clients range from small businesses to large corporations; what they all have in common is a desire to offer customized 401(k) retirement plans that support their teams and align with their organizational goals.

Whether you’re setting up a new plan or optimizing an existing one, we provide the depth of experience and commitment to service that ensures your plan drives meaningful results.

Enhance employee retention, simplify plan administration, stay compliant with evolving regulations, and offer competitive retirement benefits with Nydia Retirement Solutions.

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Types of Retirement Plans

Traditional 401(k) Plans

Key Elements

Employee contributions are made pre-tax, lowering taxable income today.
Growth is tax-deferred until funds are withdrawn in retirement.
Withdrawals are taxed as ordinary income.
Required minimum distributions (RMDs) begin at retirement age.

How Traditional 401(k)s Work

Most employer-sponsored retirement plans are traditional 401(k)s. Employees choose to defer a portion of their salary into the plan, and those contributions are made pre-tax, reducing taxable income for the year. The funds are invested and grow tax-deferred until retirement.
When employees begin withdrawing, typically at or after retirement age, distributions are taxed as ordinary income. Required Minimum Distributions (RMDs) apply starting at age 73, ensuring funds are eventually drawn down. For many participants, withdrawals occur when they are in a lower tax bracket than during peak earning years.

Roth 401(k)s

Key Elements

Contributions are made with after-tax dollars.
Withdrawals in retirement are tax-free if conditions are met.
Offers tax diversification alongside traditional 401(k) options.
No income limits for participation, unlike Roth IRAs.

How Roth 401(k)s Work

A Roth 401(k) offers a differently structured tax advantage. Contributions are made with after-tax dollars, meaning there is no income tax deduction. However, the tradeoff is tax-free withdrawals of investment earnings in retirement. Unlike Roth IRAs, Roth 401(k)s do not have income limits, allowing higher earners to contribute more. Roth contributions can be used in addition to traditional 401(k) contributions.

401(k) Profit Sharing Plans

Key Elements

Employers can make discretionary contributions based on company performance.
Contributions can be allocated using formulas like pro-rata, cross-tested, or age-weighted.
Provides flexibility to reward employees in strong years without long-term commitments.
Contributions are tax-deductible for the employer.

How Profit-Sharing Works

Profit sharing plans mean employers contribute to employee retirement accounts based on company performance. These contributions are flexible so employers can contribute more in profitable years. Contributions can be calculated using pro-rata, age-weighted, or cross-tested methods, benefiting owners and key employees while supporting the entire workforce. Profit sharing is tax-deductible for the company, making it advantageous for everyone involved.

Safe Harbor Contributions

Key Elements

A plan design that automatically satisfies IRS nondiscrimination testing.
Employers commit to a specific match or non-elective contribution for employees.
Ensures highly compensated employees can maximize their deferrals.
Simplifies compliance while strengthening benefits for all employees.

How Safe Harbor Works

Safe Harbor 401(k) plans automatically satisfy IRS nondiscrimination testing, a major compliance concern for many employers. To qualify, businesses must commit to either a set employer match or a non-elective contribution to all eligible employees. While this requires consistent employer funding, the payoff is significant: highly compensated employees can maximize their own contributions without risk of corrective distributions. Safe Harbor plans simplify compliance, strengthen participation, and provide equitable benefits across the workforce.

Plans designed with people in mind. Supporting owners, key employees, and every member of your team

Reach out to a team member to discuss your benefit plan options.

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Benefits of a Well-Designed Retirement Plan

A 401(k) plan is more than a retirement vehicle, it’s a strategic investment in the future of your business and your team. Balancing tax efficiency with employee retention – the delicate balance of the best benefits for your unique situation.

The right 401(k) plan doesn’t force you to choose between company savings and employee value. We structure contributions to reduce corporate taxes while strengthening long-term commitment and financial security across your team.

Company Benefits
Advantages that extend beyond compliance.
A well-structured 401(k) profit sharing plan positions your company as an employer of choice, demonstrating a clear investment in your people, while also providing meaningful tax savings to your business.
- Attract employees by offering benefits that show long-term commitment to their future.
- Retain top talent with plans that keep employees engaged and invested in staying.
- Reduce taxable income with contributions and administrative costs that are deductible.
- Reward performance by aligning contributions with company or individual results.
- Together, these elements strengthen your culture, improve retention, and create financial efficiency for your business.
Employee Benefits
More than retirement, a secure financial future
A thoughtfully designed 401(k) plan gives employees more than a retirement account, it provides confidence in their financial future. When employees see their company investing in them, engagement and loyalty naturally increase.
- Automatic savings: Contributions deducted directly from payroll make it easy to build long-term retirement security.
- Real ownership: Vesting schedules give employees a clear path to owning their benefits, reinforcing trust and commitment.
- Accelerated growth: Employer matching and profit-sharing options help employees grow their savings faster than they could on their own.
- Retirement flexibility: Employees who retire at 55 or later can withdraw without the standard 10% early withdrawal penalty, giving them more control over their timeline.
These features give employees confidence that their future is secure while strengthening their connection to the company today.
Tax Benefits
Powerful tax advantages for both employees and employers
At Nydia, we build tax efficiency directly into every plan design, ensuring savings today and growth for the future. These built-in advantages make 401(k) plans one of the most effective tools for both tax strategy and employee financial security.
- Lower taxable income (Employee): Employee contributions are deducted pre-tax, reducing current taxable income and lowering annual tax bills.
- Tax deferment (Employee): Contributions and investment growth are tax-deferred until retirement, when income is often taxed at a lower rate.
- Deductible contributions (Employer): Employer contributions, including match and profit sharing, are tax-deductible, directly reducing business taxable income.
- IRS tax benefits (Employer & Employee): Investment gains and elective deferrals are sheltered from federal income tax until distribution, maximizing long-term compounding and compliance.

Articles and Insights

401(k) Profit Sharing Plans

Strategic 401(k) Plan Design

Enhance employee retention, simplify plan administration, stay compliant with evolving regulations, and offer competitive retirement benefits with Nydia Retirement Solutions.

Types of Retirement Plans

Traditional 401(k) Plans

Roth 401(k)s

401(k) Profit Sharing Plans

Safe Harbor Contributions

Plans designed with people in mind. Supporting owners, key employees, and every member of your team

Benefits of a Well-Designed Retirement Plan

Company Benefits

Advantages that extend beyond compliance.

Employee Benefits

More than retirement, a secure financial future

Tax Benefits

Powerful tax advantages for both employees and employers

Articles and Insights

Cross-Tested vs Pro-Rata vs Integrated vs Age-Weighted 401ks

What the SECURE Act 2.0 Means for Your Retirement

Why Hire A Third Party Administrator (TPA)?

What is a Safe Harbor 401k Plan

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