Most people, especially business owners, think of a 401(k) as a basic retirement benefit. A place to stash some money for later years. Something you get once you have "enough" employees. But as 401(k) specialist Matt Rutenberg explains, that traditional view is wildly outdated. Today’s 401(k) rules allow far more flexibility, far bigger tax advantages, and far more wealth-building potential than most business owners ever realize.
Matt joins the show (two Matts, yay!) to walk through how modern 401(k)s actually work, and why almost everything you assume about them is inaccurate. He explains how plan design shapes how much you really get to save, how small business owners and even solopreneurs can legally contribute far more than they think, and how strategic layers like profit sharing, cash-balance plans, and self-directed investing change the game entirely. This episode was an eye-opener!
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“Help me reshift or rethink about what 401Ks mean to the individual, and entrepreneurship doesn’t just mean someone that owns a company with 150 employees. Business owners have a huge advantage in terms of what’s available to them and for tools, like tax tools, right? And so if you’re a solopreneur or you’re an independent contractor or you have a side hustle…you have something available, which is the 401K, because you are self-employed.”
“A lot of people think that $23,500 is the maximum you can put into a 401K. And the reality is, once you’re a business owner, you have this self‑employed income—you don’t need an entity, you just need to have self‑employed income. As long as you’re showing that income, you can unlock this 401K. But once you do that, now we’re talking $70,000 of contributions you can put into a 401K. And even on top of that…multiple six‑digit contributions that you can get into these things.”
“In reality, it’s a tax strategy. It just has to be looked at that way. And when you do that, it just unfolds more opportunity to help scale your business or to buy more franchises or whatever it is—buy real estate, things like that. It’s just knowing how to do that and finding the tools to do it that way.”
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Guest Links:
Youtube: (3) Matt Ruttenberg - Financial Entrepreneur - YouTube
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All right, today's guest is here to flip the script on how business owners think about retirement plans.
I messed that up, didn't I? All right, let me try it again.
Today's guest is here to flip the script on how business owners think about retirement plans. He's a 401(k) expert who teaches entrepreneurs how to use their 401(k), not just as a benefit for their employees, but as a powerful tool to cut taxes, increase cash flow, and build long-term wealth.
He's been featured on dozens of podcasts, hosts and co-hosts The 401(k) Podcast, and helps business owners all over the country turn their retirement plan stack into one of the most valuable assets in their business.
You can find him online at 401k.expert.
Matt Ruttenberg, welcome to the show.
Thank you, Matt. I really appreciate you having me on. Thank you so much.
Sure. Happy to have you.
Let's start here. Tell everybody what you do, how long you've been doing this, and how you got into helping business owners rethink their 401(k)s.
Yeah, absolutely.
I'm the co-owner of a 401(k) administration company. I've been in the finance industry for over 20 years. I'm actually a third-generation financial professional.
For part of those last 20 years, I worked as a financial advisor and financial planner, where I was more of a generalist. Eventually, I realized I wanted to become a specialist and work exclusively with business owners.
I find it fascinating. Every entrepreneur is different. Every business journey is unique. I can sit and talk business with people for hours and never get bored.
Becoming a specialist allowed me to sit on the same side of the table as the business owner, the CPA, the financial advisor, and everyone else involved. It allows me to be part of the team.
That's really what I wanted. I wanted to connect people, collaborate, and help build stronger businesses. When you have the right team around you, you're a much more powerful business owner.
Makes sense.
So you started as a financial advisor and found your niche—or maybe even your passion—in this area.
Most people have a general idea of what financial advisors do. You call yourself a 401(k) expert. What's the difference, and why does that difference matter?
I look at financial advisors, financial planners, and even CPAs as the quarterbacks of the financial team.
They're the general practitioners. They're the people who diagnose issues, identify opportunities, and help put together the overall strategy.
Then they bring in specialists for specific needs.
What we do is very specialized. We're not financial planners. We don't usually look at 90% of the client's financial picture. Instead, we focus on maximizing one specific goal.
A lot of the time, that goal is reducing taxes.
We work hand in hand with the financial advisor, CPA, tax strategist, or whoever else is involved. We have a very narrow focus, but that focus can create a tremendous impact.
So when people hear the words "entrepreneur" and "401(k)," they usually think of bigger companies.
But that's not necessarily true.
Most people are familiar with a traditional employer-sponsored 401(k). You go to work, receive a W-2, and your company offers a retirement plan.
But what about solopreneurs?
What about someone making $30,000, $40,000, $50,000, or $60,000 running a photography business, walking dogs, consulting, or managing a few rental properties?
Help people rethink what a 401(k) can mean. Entrepreneurship doesn't just mean owning a company with 150 employees.
Business owners have a tremendous advantage when it comes to tax tools and retirement planning opportunities.
If you're a solopreneur, independent contractor, or someone with a side hustle, you can unlock opportunities that most people don't realize exist.
Many people think the maximum contribution to a 401(k) is $23,500. That's true for employee salary deferrals, but once you're self-employed, the rules change.
You don't even need a formal business entity. You simply need self-employed income.
That could mean:
As long as you're reporting self-employed income, you can potentially open a Solo 401(k).
Once you do that, contributions can increase dramatically.
We're no longer talking about $23,500.
We're talking about contribution limits approaching $70,000, and in some situations, even much higher.
Later we'll discuss how some business owners can reach six-figure annual retirement plan contributions.
Simply having self-employed income unlocks opportunities most people never know exist.
Most people view a 401(k) as an employee benefit.
In reality, it's a tax strategy.
When you start viewing it that way, a whole new world of opportunities opens up—whether that's growing your business, acquiring franchises, investing in real estate, or building long-term wealth.
You mentioned taxes, and I did too.
Would you say most business owners—whether they're large business owners, small business owners, or solopreneurs—are overpaying in taxes without even realizing it?
True or false?
And if true, why is it happening?
One of the biggest misconceptions I see is that people believe all 401(k) plans are created equal.
They're not.
People often assume:
"Check. I have a 401(k). Done."
But there are many different types of 401(k) plans.
The difference comes down to the legal plan document, known as the adoption agreement.
Think of it this way:
You can download a boilerplate legal document online, fill in your information, and call it done.
Or you can hire an attorney to customize that document specifically for your needs.
The same principle applies to retirement plans.
Some plans are essentially one-size-fits-all.
Others are customized.
That customization can make a massive difference.
When we work with a business owner, we start by asking two questions.
First:
Why are you creating this retirement plan?
Then we ask:
How much do you want to save?
Or, if taxes are the issue:
How much tax pain are you experiencing?
Do you have a five-figure tax bill?
A six-figure tax bill?
Once we understand the objective, we can design the retirement plan around the owner's goals rather than forcing them into a generic template.
Okay, let's break this down into three different audiences...
Okay, can you break that down into three different audiences?
First, the small business owner. Let's say anywhere from two to 99 employees.
Second, someone who has more than a side hustle. Maybe one spouse runs a business with five or ten employees, while the other spouse works a W-2 job with a traditional 401(k).
And third, the solopreneur. Maybe it's a consulting business, dog-walking business, photography business, or something similar.
How should people think about retirement plans and taxes in those three situations?
Let's start with the solopreneur because that's one of the most common conversations we have.
When you're a solopreneur, the first question becomes easy because we already know the plan is for you. There aren't any employees to consider.
Now the conversation shifts to:
In most cases, it's primarily a tax strategy.
A Solo 401(k) has two contribution buckets.
The first bucket is you as an employee of your own company.
That's the salary deferral portion, which is currently $23,500.
The second bucket is you as the employer of your own company.
That's called profit sharing, also known as employer contributions.
The profit-sharing portion is what helps get you closer to the overall contribution limit.
Once we know how much you want to save, we can determine how to allocate contributions between those buckets.
The exact numbers depend on factors such as:
But ultimately, the conversation becomes surprisingly simple.
It comes down to:
How much do you want to save, and how much do you want to reduce your taxes?
So if I understand that correctly, let's say I'm a solopreneur and I make $70,000 in a year.
Hypothetically, if I have a Solo 401(k), could I contribute the full $70,000 and show zero income?
Not exactly.
Let's use that $70,000 example.
The overall contribution limit is governed by what's known as the Section 415 limit.
First, you have the employee contribution portion, which is $23,500.
Then you add the employer contribution, which is generally based on a percentage of compensation.
Using $70,000 as the example:
That gives you a total contribution of approximately $41,000.
This is where a Solo 401(k) differs significantly from a SEP IRA.
Many people have heard of SEP IRAs.
A SEP IRA essentially allows only the employer contribution portion.
Using the same example, you'd be limited to roughly $17,500.
With the Solo 401(k), you're able to add the employee contribution on top of that, more than doubling the amount you can contribute.
If someone only wants to contribute around $15,000, I may suggest a SEP IRA because it's simpler and requires less administration.
But once they want to save significantly more than that, the Solo 401(k) becomes much more attractive.
Okay.
What about the small business owner?
Let's say someone owns a retail store with five or ten employees.
What does retirement planning look like for them?
That situation can vary quite a bit.
The most important thing is understanding the goal.
Why are they creating the plan?
Some business owners are just getting started.
Maybe employees are asking for a retirement plan.
Maybe a state mandate requires one.
In those situations, the focus may simply be providing a benefit.
Other owners are reinvesting heavily into their businesses.
They're growing.
They're expanding.
They're not necessarily focused on maximizing retirement savings yet.
For those business owners, we may design the plan differently.
Then there are business owners who reach their forties or fifties, finally look up after years of building their company, and realize they're generating significant profits.
Often, their CPA says:
"We need to do something."
At that point, creating or optimizing a retirement plan becomes one of the most powerful tools available.
It's not unusual for CPAs to recommend things like:
Those are common planning opportunities.
Many business owners start with basic employee deferrals and then gradually add profit-sharing contributions as profits increase.
Eventually, they may add additional retirement plan layers such as defined benefit plans.
Okay.
What about larger businesses?
When you say larger businesses, are we talking about employee count or profit levels?
Let's say 25 or more employees.
A legitimate small business.
Twenty-five employees doesn't feel small to me, but let's use that as the example.
I agree. Twenty-five employees feels pretty substantial.
At that point, plan design becomes incredibly important.
I've seen a lot of plans that were designed inefficiently.
Efficiency becomes the key metric.
When I say efficiency, I'm talking about how much the owner gets to contribute versus how much must be contributed for employees.
The tax code is actually very favorable to business owners, provided employees are treated fairly.
For example, let's use a physician group:
In that situation, efficiency matters.
This is where the retirement plan stack becomes powerful.
A properly designed stack might include:
We've had clients contribute two to three million dollars annually into retirement plans while maintaining efficiency ratings around 90%.
In other words, approximately 90% of the benefits were going to owners and 10% to employees.
The employees were still being treated fairly and receiving meaningful benefits, but the owners were maximizing the opportunities available to them under the tax code.
You mentioned the retirement plan stack.
Let's talk about that.
What exactly is it?
We coined the phrase "Retirement Plan Stack" because it helps people visualize how retirement planning works.
The retirement-plan world is enormous.
You have:
The list goes on.
The easiest way to visualize it is as an upside-down wedding cake.
The bottom layer is the 401(k).
Traditionally, people think that's the big contribution.
In reality, it's just the foundation.
Above that sits profit sharing.
Above profit sharing sits a defined benefit plan.
And then, in certain situations, executive benefit plans may sit on top.
As profits grow, additional layers can be added.
Each layer is designed to maximize the benefits of the layer above it.
The structure matters.
If a plan is designed incorrectly, business owners can end up contributing significantly more money to employees than necessary.
That's not necessarily bad if your goal is generosity.
If you're a successful business owner and want to create wealth for your employees, that's admirable.
But if your goal is maximizing efficiency, the plan needs to be designed accordingly.
We've seen situations where poor plan design caused business owners to contribute tens of thousands of dollars more than necessary.
The retirement plan stack helps ensure that doesn't happen.
Okay.
Give me the layers one more time.
Absolutely.
First is the 401(k).
That's the employee salary deferral portion.
Currently, that's $23,500.
Second is profit sharing.
Profit sharing helps increase total contributions toward the overall limit.
Third is the defined benefit plan.
Most people know these as pensions.
Think about the old pension plans from companies like Ford or General Motors.
Today's versions are often structured as cash balance plans, but they're still technically defined benefit plans.
When combined properly, these layers can produce annual retirement contributions exceeding $350,000 per person.
If a spouse is involved in the business, those numbers can increase dramatically.
The fourth layer is less common and usually reserved for larger organizations.
Those are executive benefit plans designed for key employees such as:
Within the defined benefit layer, there are additional advanced strategies available, including life insurance strategies designed for multigenerational wealth transfer.
Those strategies often involve attorneys, CPAs, and multiple specialists working together.
That's where things become especially powerful.
I didn't realize numbers like that were even possible.
I'd heard of Solo 401(k)s, and of course we all know about traditional 401(k)s in a small business setting. But once you start talking about those higher contribution levels, you're getting into serious income and serious profitability.
You mentioned physician groups, which seems like a perfect example.
If I'm listening to this and thinking about my own situation, what level of income does my business need to generate before these different layers start making sense?
When you're at the first layer, you're typically still in growth mode.
You're trying to diversify. You're trying to start saving early. Compound interest is important.
In many cases, your goal is actually to reduce your taxable profit as much as possible.
That's where the 401(k) comes into play.
You can even show a loss and still utilize some of these strategies.
The profit-sharing layer generally starts becoming attractive when profits reach roughly $150,000 to $200,000 or more.
At that point, you begin looking at ways to move larger amounts of money into retirement plans.
A common conversation is:
"How do we get another $100,000 off the books?"
That's where profit-sharing calculations become very useful.
Once profits start moving toward $500,000 or more, the defined benefit plan becomes much more attractive.
Of course, personal lifestyle needs matter too. You still need enough cash flow to live on.
But generally speaking, around the $500,000 profit range is where many business owners start seriously evaluating defined benefit plans.
Beyond that, additional strategies become available.
You can layer in split-funded defined benefit plans and insurance-based strategies.
Once profits move into seven figures, you begin combining retirement plans with other tax-planning tools such as charitable strategies, family foundations, and other advanced techniques.
The important thing to remember is that the retirement plan is just one tool within a much larger tax-planning toolbox.
I'm going to guess that many financial advisors and CPAs don't know a lot of this.
So what questions should people be asking?
Should someone start planning this when they're just getting started, or is this something only established business owners should consider?
How do people know whether their CPA or tax preparer is thinking about these opportunities?
That's a great question.
First, most financial advisors and CPAs don't specialize in this area.
And honestly, that's okay.
It's not necessarily their job.
Their role is often to identify issues and connect clients with specialists.
One of the biggest misconceptions in the business world is that people assume:
"I have a CPA, therefore my CPA should be bringing every tax strategy to me."
That's generally not how it works.
CPAs are primarily responsible for:
Tax planning is different.
Tax strategy is different.
Tax strategists can come from a variety of backgrounds:
There are thousands of tax strategies available.
For example, there are investment strategies involving Hollywood film production that can create substantial deductions.
Most people have never even heard of them.
That's why business owners often need to do some research themselves and then bring those ideas to their CPA or advisory team.
A CPA can then help determine whether a strategy makes sense for that specific situation.
Tax planning is not the same thing as accounting.
If you're paying a few thousand dollars per year for tax preparation, that's generally not comprehensive tax planning.
Comprehensive planning requires time, analysis, and collaboration.
That makes sense.
Let's go back to the concept of boilerplate versus custom retirement plans.
A boilerplate plan may be perfectly fine if you're simply trying to satisfy a state retirement-plan mandate.
For example, many states now require employers above a certain size to offer some type of retirement savings option.
In those situations, a simple, inexpensive, turnkey solution may be completely appropriate.
You check the box and move on.
But if you're trying to maximize tax savings, retirement contributions, and overall planning opportunities, customization becomes much more important.
Plan design matters.
Eligibility matters.
Vesting schedules matter.
Safe harbor provisions matter.
All of those factors can affect outcomes.
One concern people often have is cost.
They hear the word "custom" and assume it will be expensive.
However, there are significant tax credits available today.
The SECURE 2.0 Act created substantial incentives for businesses to establish retirement plans.
Many employers can receive tax credits that offset a large portion of their startup and administrative expenses.
In some cases, the credits can be substantial enough to cover most of the costs associated with implementing the plan.
The government is actively encouraging retirement savings, and these incentives are part of that effort.
You mentioned SECURE 2.0.
These plans have been around for decades.
The 401(k) has existed since the early 1980s.
Do you think the traditional 401(k) model is outdated?
I think the traditional model has become very standardized.
It's packaged.
It's streamlined.
It's designed to be easy.
Most people picture a typical retirement plan with:
That's what most people think of when they hear "401(k)."
Many business owners call us because they're being required to offer a retirement plan and they don't necessarily want a simple state-sponsored IRA program.
They want something more flexible.
The traditional investment menu is fine, but it isn't the only option.
You aren't limited to a handful of mutual funds forever.
That's where customization and self-direction begin to enter the conversation.
Let's go there.
Everybody understands the traditional model.
Target-date funds.
Stock funds.
Bond funds.
A few international options.
You log in once or twice a year, rebalance, and move on.
Talk to me about using retirement plans for real assets.
What does that mean?
That brings us into the world of self-directed retirement accounts.
Most people are familiar with the term "self-directed IRA," but self-directed 401(k)s can be extremely powerful as well.
Real estate investing has exploded in popularity over the past decade.
Social media and television have helped fuel that growth.
But real estate is only one example.
Inside a properly structured self-directed retirement account, you can potentially invest in:
There are only a handful of prohibited investments, such as collectibles and artwork.
The key concept is that you're applying retirement-plan tax advantages to those investments.
For example, if you flip a property outside a retirement account, you may owe significant taxes on the gains.
Inside a retirement account, the tax treatment is different.
If the investment is held within a traditional retirement account, taxes are deferred.
If it's held within a Roth structure, future qualified growth may be tax-free.
This is one reason self-directed investing attracts so much attention.
Now, real estate itself has tremendous tax advantages outside retirement accounts as well.
Depreciation.
Cost segregation studies.
Various deductions.
There are valid arguments on both sides.
But many investors like the idea of combining alternative assets with retirement-plan tax benefits.
A lot of people don't realize that 401(k)s can include Roth components as well.
That opens even more possibilities.
At the end of the day, the 401(k) serves as an umbrella.
Within that umbrella, you can potentially hold investments through multiple custodians and investment platforms, provided everything is structured properly.
So let me make sure I understand.
I can buy cryptocurrency.
I can buy real estate.
I can't buy art.
Let's say I'm an employee. I've worked for a company for years and have accumulated a million dollars in my employer-sponsored 401(k).
Can I do anything beyond the standard investment options?
If you're actively employed and participating in a company-sponsored retirement plan, what you're allowed to do depends largely on how that employer's plan was designed.
When you have a large employee base, compliance becomes much more complicated.
Allowing every employee to go buy duplexes, invest in private real estate, or engage in other self-directed activities creates a tremendous amount of administrative complexity.
Most employers don't want to open that Pandora's box.
So while it may technically be possible, it's generally uncommon in traditional employer-sponsored plans.
These types of self-directed strategies tend to be far more common in Solo 401(k)s because there are no employees to manage and monitor.
As a business owner, if you choose to offer yourself a particular investment option, you generally need to make that same opportunity available to employees as well.
Most employees don't take advantage of those options, but they must be offered to remain compliant.
Instead, many employers choose to offer what's called a brokerage window or brokerage sleeve.
That allows employees to access a broader range of traditional investments through platforms such as Fidelity or Schwab while still maintaining a manageable level of oversight.
Okay, let me put a twist on that.
Let's say I'm still employed and contributing to my current employer's 401(k).
However, I have four previous employer plans that I've rolled into an IRA, and that IRA has grown to a million dollars.
Can I do anything with that money?
Absolutely.
You can roll those assets into a self-directed IRA.
Once they're in a self-directed IRA, you can potentially access many of the alternative investment opportunities we've been discussing.
There are some important distribution rules to understand.
This is where plan design and regulations become important.
For example, if you're over age 59½ and your current employer's plan permits what's called an in-service distribution, you may be able to move assets while you're still employed.
However, not every plan allows that.
Again, it comes back to how the plan was designed.
Interesting.
There's another scenario that comes up frequently.
Let's say you have a traditional W-2 job, but you also have a side business.
Maybe you're:
That opens up some interesting opportunities.
You can have both your employer-sponsored 401(k) and your own Solo 401(k).
Really?
Yes.
Let's go back to the two contribution buckets.
You have:
The employee salary-deferral limit applies across all plans combined.
You cannot contribute $23,500 into multiple plans separately.
You get one employee-deferral limit.
However, employer contributions operate differently.
Many people maximize their employer plan at work and then use their Solo 401(k) for additional profit-sharing contributions generated by their side business.
That creates opportunities to save significantly more money.
So if I'm understanding correctly, I could contribute to my employer's 401(k), receive the company match, and then also contribute through my side business?
Exactly.
And in some cases, you can effectively double-dip on the profit-sharing side.
For example, let's say someone works in a highly compensated field such as information technology.
Their employer already contributes heavily to their workplace retirement plan.
Now imagine they also operate a profitable consulting business on the side.
They've already used their employee salary-deferral limit through their day job.
That's maxed out.
But their consulting business can still generate employer contributions through a Solo 401(k).
Those profit-sharing contributions can potentially add tens of thousands of additional dollars to retirement savings.
In some situations, total annual retirement contributions can exceed $100,000 across both plans.
And because the Solo 401(k) can be self-directed, those additional dollars can potentially be invested in alternative assets such as real estate, private lending, or other approved investments.
That's fascinating.
It's also mind-bending.
My brain immediately starts thinking about all the possible scenarios.
What if I start a business now?
Should I wait?
How much income do I need?
What if my spouse works?
What if I have a side hustle?
There are so many variables.
Have you seen any success stories that really stand out?
Someone who turned what most people think of as a simple retirement plan into a major wealth-building tool?
Absolutely.
I have a lot of interesting case studies.
Let me share one that's fairly recent.
I'm going to use a Solo 401(k) example because those are often the easiest to understand.
When there are no employees involved, everything becomes much simpler.
The client was a highly successful consultant earning substantial income.
His wife also became involved in the business.
We implemented the full retirement plan stack:
Because his wife was employed by the business, we were able to significantly increase overall contribution opportunities.
A spouse can participate in a Solo 401(k), and the plan can still maintain its simplified structure.
It's similar in concept to a spousal IRA.
Right.
After implementing the full stack, we were able to generate approximately $575,000 per year in retirement-plan contributions between the two spouses.
All of those contributions were pre-tax.
As a result, they dramatically reduced their annual tax burden.
Part of the strategy involved a split-funded defined benefit plan that incorporated a cash-value life insurance component.
The life insurance portion was designed to support long-term family wealth planning.
Eventually, those assets could be transferred into trust structures intended to benefit children and grandchildren.
The ultimate goal wasn't just retirement savings.
It was creating a multigenerational legacy.
That's incredible.
Although it's pretty obvious those two people were making a lot of money.
Absolutely.
But it's not just doctors and attorneys anymore.
We work with:
Professional athletes, for example, often have unique opportunities because they may have endorsement income, business ventures, pension opportunities, and other revenue streams.
The tax code is full of opportunities for business owners.
The key is understanding how to use them while still taking care of employees and staying compliant.
Let me circle back to something we discussed earlier.
How can someone tell whether their CPA or retirement-plan administrator is leaving money on the table?
That's a difficult question because there are so many possibilities.
But generally speaking, if you have a significant tax bill, there are usually strategies worth exploring.
The first level strategies are things many people have heard of:
Those can be useful.
But once you're facing substantial tax bills, especially six-figure tax liabilities, there are often more advanced planning opportunities available.
That's where specialists come in.
And I want to be clear:
This is not about firing your CPA.
It's about building a stronger team.
Your CPA remains an important part of that team.
A retirement-plan specialist, tax attorney, or tax strategist simply adds another layer of expertise.
That's how sophisticated planning is typically done.
No one person knows everything.
The best outcomes usually come from collaboration among specialists.
If you could look into the future, what's the biggest upcoming change in retirement planning that business owners of all sizes need to prepare for right now?
I'd say state retirement-plan mandates.
The biggest retirement-plan legislation we've seen recently was the SECURE 2.0 Act. It created a number of changes, including tax credits, new deadlines, and updated retirement-plan rules.
But looking forward, state mandates are becoming increasingly important.
There was discussion in recent years about creating a federal mandate, but for now, we're seeing action at the state level.
Many states either already have retirement-plan mandates in place or have legislation moving through the process.
States such as:
already have significant retirement-plan requirements.
Some of the more aggressive mandates require employers with very few employees to offer some type of retirement savings option.
For example, in some situations, employers with just one employee may eventually be required to provide a retirement-plan solution.
Many other states have thresholds of five employees or more.
If you receive a notice from your state regarding retirement-plan requirements, don't ignore it.
It's important to understand your obligations.
At this point, roughly 43 states either have legislation in place, have passed legislation, or are actively considering retirement-plan mandates.
Only a handful of states currently have no significant movement in this area.
You just listed a number of states that are often considered relatively high-tax states.
That's true.
The states without mandates tend to be the ones you'd expect.
States such as:
have generally been slower to pursue retirement-plan mandates.
But overall, the trend is clear.
More states are moving toward requiring some type of retirement savings option.
So what should business owners do?
The default solution is often the state-sponsored IRA program.
Those programs are typically free for employers.
Employees contribute through payroll deductions, and employers generally aren't required to provide matching contributions.
For some businesses, especially those in startup mode, that's perfectly acceptable.
If you're focused on growth and simply need to satisfy the requirement, that may be enough.
Another option is a basic, turnkey 401(k) platform.
Those plans are often inexpensive and easy to implement.
But if you're interested in using a retirement plan strategically—if you want tax savings, wealth-building opportunities, and flexibility—then it's worth slowing down and exploring more customized options.
Don't automatically choose the easiest path without understanding what you're giving up.
Many business owners focus heavily on payroll integration because it's convenient.
And while convenience matters, it shouldn't be the primary factor driving your retirement-plan decisions.
The bigger question should be:
What impact will this plan have on my taxes, my wealth-building opportunities, and my long-term goals?
At the end of the day, it's all about the net result.
Are you creating value, or are you leaving opportunities on the table?
This has been great.
We've talked about everything from IRAs and Solo 401(k)s to physician groups and multimillion-dollar retirement-plan strategies.
Some listeners may have a simple IRA.
Others may have a large 401(k) balance.
Some may have side hustles.
Others may own growing businesses.
So as we wrap up, who's the ideal person to work with you?
And how can people learn more?
We tend to work with people who want more control over their retirement plans.
Many of our clients are interested in self-directed opportunities, whether that's:
We also work with people who understand the value of building a team around them.
They know they're experts in their own field, whether that's medicine, law, consulting, athletics, content creation, or something else entirely.
Rather than trying to master every financial strategy themselves, they prefer to work with specialists.
We become one part of that team.
Another common client is someone whose profitability is increasing.
They don't want to start over every few years by switching from one retirement-plan structure to another.
Instead, they want a custom foundation that can grow with them.
As profits increase, additional layers can be added to the retirement plan stack.
Our approach is highly consultative.
We help with planning throughout the year.
We help evaluate contribution levels.
We run projections.
We coordinate with CPAs and other advisors.
We want clients to understand exactly how these strategies impact their situation before implementing anything.
If the numbers don't work, we'll tell you.
We're not interested in implementing a strategy that doesn't provide a meaningful benefit.
Sure.
Ultimately, I'd encourage people to start asking questions.
The retirement-planning world is simply too large for any one professional to know everything.
Financial advisors are valuable.
CPAs are valuable.
Tax attorneys are valuable.
Retirement-plan specialists are valuable.
Each person brings expertise to the table.
Think of it like a bicycle wheel.
Every spoke serves a different purpose, but together they create a stronger structure.
If you'd like to learn more, visit 401k.expert.
You'll find information, case studies, and ways to connect with our team.
Our goal is education first.
We're not salespeople. We're educators.
We'll explain what's available, discuss potential opportunities, and help you determine whether any of these strategies make sense for your situation.
We'll also gladly work directly with your CPA or advisory team because successful planning is always a collaborative process.
Matt, this was awesome.
Most entrepreneurs, side hustlers, solopreneurs, and business owners are focused on building their companies and growing revenue.
What I learned from this conversation is that many people don't realize their retirement plan may be one of the most powerful wealth-building tools available to them.
Thank you for joining me today.
If you'd like to learn more, visit 401k.expert.
Matt has resources, videos, and educational materials that can help you build a smarter retirement plan, reduce taxes, and create long-term wealth.
Matt, thanks again for joining me.
And thanks to everyone listening and watching for being part of this community pursuing wealth, wisdom, and wellness in every stage of life.
Thanks, Matt.
For up-to-date Medicare information, visit:
www.prepareformedicare.com
