Why Your Business Should Offer a 401(k) Plan
Most people realize that, in the 21st century, we all have to accept more responsibility for saving for our retirement. Many small business owners of today are concerned that they won’t have enough money to retire. And what about your employees? They’re going to need nest eggs, too. There are plenty of reasons why your business should consider offering a 401(k) plan. Here’s why.
- Attract and Retain Employees
Potential employees are looking at their full benefits package when considering a new job. In addition to salary, healthcare coverage and retirement plan access are becoming increasingly important. Seventy percent of employees surveyed report a 401(k) plan or other retirement plan is a “must have” benefit.
- Assist Employees in Saving for Retirement
For many employees, retirement savings has taken a backseat to other financial obligations. Money is consistently a top source of stress for workers and many employees are financially overwhelmed, with little retirement savings and no emergency fund. Companies that choose to offer a retirement plan can have a big impact on their employees’ futures.
- Potential Tax Saving Advantages of a 401(k) Plan
As a business owner, retirement plans enable you to receive a possible tax credit of up to $500 for startup administrative costs each of the first three years of the plan. There are also potential tax deductions for offering an employer matching contribution. And participants who make pre-tax 401k deferrals lower their taxable income and may be eligible for a tax credit.
- 401(k) Plans can be Easy to Set-up and Maintain
Today, retirement plans are typically designed to be easy to set-up, administer and maintain. Many retirement plan providers offer an automated process for handling complicated and time-consuming plan administration tasks, helping to reduce the risk of errors.
- A Financial Wellness Program Can Help Increase Employee Productivity
Financially stressed employees are typically less productive at work and can cost their employer productivity and money. Nearly one-third of all employees report being distracted by personal financial issues while at work, with almost half of that group spending three hours or more each week handling personal finances at work. Additionally, employees are twice as likely to report missing work on account of their personal financial issues and more inclined to cite health issues caused by financial worries. Many 401(k) platforms offer a comprehensive Financial Wellness program which can help employees face their financial decisions with confidence.
Do you have any questions about 401K plans? Contact guest author and Certified Financial Planner Leah Weinberg of Weinber Finanical Group www.weinbergfinancial.com– firstname.lastname@example.org– 617-965-1965.