Let’s face it, as a small business owner you wear many hats. On Monday, you may be the HR person, Wednesday you’re the sales team and on Friday you’re forging relationships and working on new business opportunities. While you believe in helping your employees with their retirement goals, there’s just no time to research options and manage a 401(k) plan … or, so you thought! Our 401(k) expert offers up four great reasons why you should rethink your options.
Reason 1: Service providers focus on small businesses
You don’t need to feel like a small fish in a big sea. There are 401(k) plan service providers whose area of expertise is focused entirely on small businesses. They understand you have a business to run and a 401(k) plan may not be your highest priority at the moment. These service providers can offer fully-bundled packages that can help you with the tools, knowledge and plan management activities that you don’t have time to oversee. They can make sure you have quality, diversified investment options that maintain an appropriate risk tolerance relative to your retirement horizon, and most importantly, help you and your employees save for retirement on a regular basis.
Reason 2: Employee retention and financial wellness
Offering a 401(k) retirement plan is a smart way to recruit and retain employees in a highly competitive work environment. An ongoing retirement savings plan enriches the benefits you offer employees. You can feel like you are doing the right thing by helping them take control of their retirement and making them more likely to meet their own retirement goals. Because of tax deferred compounding 401(k) plans become an efficient way for both you and your employees to save and invest for retirement.
Reason 3: Flexible 401(k) plans fit the culture and future goals of the company
Flexible plan options give small business owners more opportunities to align a retirement savings plan with company core values and culture. Employers can enforce eligibility restrictions, select a vesting schedule and offer matching contributions. Plans can allow profit sharing, automatic enrollment features and participants to take out loans against their 401(k) savings. And, participants can invest in their retirement through convenient salary deferrals that are generally not taxed until funds are distributed.
Reason 4: Future tax savings for your business
Don’t always assume a 401(k) plan is something you can’t afford. Not only are there cost-effective retirement plan options, but the tax savings often make up a portion of the costs. If you are establishing a plan for the first time, your company can receive a three-year tax credit for 50% of the startup cost, up to $500 per year. This tax credit can offset setup and administrative fees of the plan. And, if you make an employer contribution to the plan, you can deduct it on the company’s federal income tax return.
Changed your mind yet on a 401(k) retirement savings plan for your business? With best-in-class programs like PAi’s CoPilot, small businesses have affordable options that can align with your business goals. Investments are monitored for performance, 3(38) services are provided by eRIA to minimize the investment liability on the employer, and you'll receive real-time messaging whenever an event occurs that may impact the health of your retirement. You'll always have a clear picture of how much retirement you and your employees are actually buying because CoPilot translates the savings into what matters most - how many years you can afford to be retired. CoPilot is changing retirement outcomes by changing the conversation. Contact us online or give us a call at 800.236.7400.
Paul Novitski, CPFA - Financial Services Representative – firstname.lastname@example.org - 800-236-7400 x3340
Paul is a subject matter expert on 401(k), retirement savings, participant advice, small business 401(k), investments, education on options