Frequently asked questions
Are you looking for a simple 401k alternative that you can trust? Learn more about our 401k plan options here or call 1-800-935-7214. Our team offers support in both English and Spanish.
What are the two Finhabits 401k plans?

Finhabits offers two 401k plans: Saver and Saver Plus, which offer different matching and vesting formulas that allow you as an employer to decide which plan better meets the needs of your workforce.

Both plans are “Safe Harbor” plans, meaning that they are designed to pass certain compliance tests automatically. This feature, popular with small businesses, comes with a matching provision to help employees start saving for retirement as soon as possible.

Additionally, the Finhabits 401k plans come with auto-enrollment and auto-escalation features. Your employees will be able to choose from a selection of lower-cost, straightforward, and diversified retirement funds to best suit their needs and their stage in life. To learn more about the Finhabits 401k plans, call 1-800-935-7214 or book an appointment with the Support Team.

How much does a Finhabits 401k plan cost?

The costs for the employer is $2,000 per year. With tax credits available for the first three years of your plan, your net out-of-pocket costs may be as low as $500 per year. These fees do not include the underlying fees and expenses of the investment funds, which are the Transamerica LifeGoal Fund with BlackRock Retirement Opportunity that is nearest to the year of an employee’s estimated retirement age.

Employees pay $3 per month ($36 per year), which is deducted from their plan accounts.

Ad-hoc tasks, such as late contribution calculations or supplemental plan filings may incur in additional fees. In addition, your employees may be charged additional fees for specific tasks or events. These can include fees for withdrawals, wire transfers and sending checks. You will be sent a full fee schedule to review with your plan agreement.


Wedon’t offer tax advice and recommend you talk to a tax adviser to better understand your options.

Do employees have to participate in the plan?

Eligible employees are automatically enrolled into the Finhabits 401k plan at a predetermined percentage of compensation, but they can increase, decrease or discontinue their contributions at any time, as well as decide how their contributions are invested. If they wish to opt out of the plan altogether, they have 90 days after their first contribution to request a distribution of their deferral contributions at no cost.

How can a Finhabits 401k plan help your employees?
Finhabits helps your employees learn smart financial habits as they save for retirement. Our app includes educational tools such as videos and articles that are presented in both English and Spanish.


Additionally, employees who do not have a Social Security number but do have an ITIN (Individual Taxpayer Identification Number) can also participate in a Finhabits retirement program.


Please note that employees also have the opportunity to opt out of your retirement program.

What if your employees don't have an SSN?

If your employees do not have a Social Security number but do have an ITIN (Individual Taxpayer Identification Number), they can also participate in the retirement program that you provide.

Will your company be required to match employee contributions?
Employers are not required to match their employees’ contributions to a 401k plan. However, employers sponsoring safe harbor plans are required to make a contribution to avoid non-discrimination testing (see information about non-discrimination testing below), which may be a driver of additional costs to the employer. In addition, employer matching contributions to the plan within certain limits are generally tax deductible on the employer's federal tax return, reducing taxable income and further reducing plan costs.

Most importantly, in this tight labor market, having an employer matching contribution is a key driver of attracting and retaining top talent. According to a recent survey, 77% of workers said the pandemic has driven them to focus more on saving for retirement, and the employer match was cited by 91% of workers as a most important retirement plan feature they consider when evaluating new job opportunities (source: Principal® Retirement Security Survey Q3 2021).

Both Finhabits 401k plans are designed with a safe harbor employer match included to avoid costly non-discrimination testing.

Wedon’t offer tax advice and recommend you talk to a tax adviser to better understand your options.

What is a safe harbor 401k plan?

Some states have mandated that employers provide a way for their employees to save for retirement at work. When states require employers to provide their employees with retirement savings opportunities, it’s known as a state-mandated retirement plan. Businesses generally have two ways to comply with these laws – enroll their employees into IRAs through a state-sponsored retirement program or sponsor a plan of their own through the private market.

State-mandated retirement plans are the result of legislation requiring small businesses to provide retirement benefits to their employees. Currently the following states have mandates:






Additionally, eight other states have legislation that has passed and are in some process of implementation.

Do I have to register with the CalSavers program regardless of my plan provider?

Offering your employees the state-sponsored program CalSavers is not mandatory, as businesses have the alternative to select a private retirement plan like a Finhabits 401k plan.

However, employers who qualify to meet this mandate – and decide to offer a private retirement plan – must inform the state about their choice and report their exemption through the website before June 30, 2022.

What are the default funds in the plan?

The default investment is the Qualified Default Investment Alternative (QDIA). When employees join the plan, they will automatically be invested in the Transamerica LifeGoal Fund with BlackRock Retirement Opportunity that is nearest to the year of their estimated retirement age. The Fund seeks to maximize returns while maintaining a level of risk appropriate for a person planning to retire in or about the calendar year designated in the Fund’s name. In addition, participants can always change their investment selection to a different fund offered by the plan.

How do I get started?

Now can be a great time to start investing in your employees and yourself. Remember, as a business owner, you also have the opportunity to participate in the plan and can take advantage of tax advantaged retirement savings.

Our onboarding process takes just a few clicks and can be completed in minutes. To begin, go to or call us at 1-800-935-7214 to learn more.

How do state IRAs compare to Finhabits 401k plans?

To address the retirement savings gap, many states have launched their own retirement programs, most often with Individual Retirement Accounts (IRAs).

While IRA programs can help many first-savers, those accounts may not be able to help all businesses and employees. Here are some reasons why you might want to consider a Finhabits 401k plan:

– Your business could receive up to $4,500 in fiscal credits for the initial 3 years of providing a plan (please check with your accountant if you could qualify)

– 401k plans have higher contribution limits than the IRAs offered by most state plans

– The 401k match has consistently proven to attract and retain talent
– Employees can download the Finhabits mobile app to check their balance, watch educational videos, learn smart money habits
– The app and support is available in English and Spanish

What is a Target Date Fund (TDF)?

A 401k plan invests the money that employees save for retirement. Finhabits invests in Target Date Funds (TDFs). Click here to learn more about them.

Get step-by-step guidance
Our U.S.-based team offers support in English and Spanish.

Questions? Call 1-800-935-7214