Okay to start up a new 401(k) now?

[katieinny]

Is it too late for an employer to set up a regular 401(k) for 2003 (calendar year)?

[mbozek]

While the plan can be adopted at any time, salary reduction contributions could only be made between the date the plan is adopted and 12/31. For most nhces a roth IRA would be a better choice especially if the nhce is in the 15% tax bracket (Married couple with no kids could have w-2 income of about 72k and be within the 15% bracket.)

[katieinny]

So, there isn't a requirement that the plan be set up by October 1 so that there can be at least 3 months of deferrals? Is that rule specific to Safe Harbor 401(k) Plans?

[Guest Richard Scheer]

The 3 month rule is only for Safe Harbor Plans

[Appleby]

The October 1 deadline also applies to SIMPLE 401(k) plans