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Retirement plans are a valuable benefit that impacts the present and future lives of employees. Creating a qualified retirement plan can be a valuable tool to business owners for several reasons. There are many benefits that a qualified retirement plan can offer employers and employees alike.
A recent study by JP Morgan found that business owners who reported offering a 401(k) plan saw the benefits—not just for their employees but for their businesses as well. The top reason cited for offering a 401(k) plan was to encourage employees to save for retirement. Retaining and attracting employees also play an important role as a reason for offering a 401(k) retirement plan.
What Are The Benefits Of Offering A 401(K) Retirement Plan?
Attract & Retain Quality Employees:
Offering a qualified retirement plan can help your business look more attractive to qualified employees. A 401(K) plan is a benefit most job seekers consider, and it can be a defining factor in their choosing to work for your business. Plus, a 401(K) plan can help you retain employees, lower turnover cost, and help your business function more efficiently.
Lower Income Taxes
Your matching contributions to your employees’ retirement plan (up to acceptable limits) are tax-deductible. Besides, the tax implications, your employees will see your matching as an investment in their financial future.
Payroll Deductions:
When employees are provided an option to invest for their future through a payroll deduction, they are more likely to do so. In addition, they are more likely to stay disciplined in their retirement planning.
What Are The Benefits Of Offering A 401(K) Retirement Plan?
Our specialists at Bethany can provide your business with the ability to offer an excellent 401(k) retirement plan structured to accommodate profit sharing and/or matching contributions from your company.
A 401(k) plan is a tax-advantaged, defined-contribution retirement account offered by many employers to their employees. It is named after a section of the U.S. Internal Revenue Code. Workers can make contributions to their 401(k) accounts through automatic payroll withholding, and their employers can match some or all of those contributions. The investment earnings in a traditional 401(k) plan are not taxed until the employee withdraws that money, typically after retirement. In a Roth 401(k) plan, withdrawals can be tax-free.
We work with leading financial investment firms to offer automatic enrollment with opt-out provisions, salary deferrals, employer contribution options, online resources, account review, and retirement calculators.
Because of the complexity of setting up a 401(k) plan, it is essential for business owners to work with a specialist who can help optimize your program through expense reduction, rollover coordination, and increasing enrollment. Contact Bethany today to get started.
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