What Is a 401(k) Safe Harbor Plan?

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Has your employer given you notice that your retirement plan will soon be converted to a safe harbor 401(k) plan? If so, you may be in for a pleasant surprise. Safe harbor plans often include employer contributions or employer matching arrangements that can benefit your retirement savings in some pretty helpful ways.

Although each plan is different, this change may mean that you’ll start to accumulate even more vested savings in your 401(k) account while making the same annual contributions. To better understand how a safe harbor 401(k) could impact the way you’re currently saving for retirement, it’s important to learn the differences between a safe harbor plan and a basic 401(k) plan.