Small business owners may think that a 401(k) retirement plan is too complex to implement and too costly to maintain. But offering a retirement plan is crucial to attracting and retaining employees. Nearly 51% of employees joined their current company because of the retirement plan. Before you decide whether or not to offer a 401(k) consider these three steps to setting up a 401(k) for your small business.
Set Your 401(k) Goals
As a business owner, be clear on why you are setting up a 401(k) small business retirement plan. Each objective might require a different plan. The three reasons a small business offers a 401(k) plan are:
- To maximize savings for business owners
- To provide tax savings
- To attract and retain employees
Tax credits are also available for small businesses, but be sure your plan is designed to take advantage of them.
Find a 401(k) Advisor
Finding a qualified advisor may take a little time. You can ask for a referral from your accounting firm or another small business owner. Your Chamber of Commerce or local Score office may have a list of advisors. Regardless of whom you select, be sure to choose a credentialed advisor. Good 401(k) advisors should offer services that:
- Build and monitor your plan
- Provide guidance on legal-related issues
- Ensure proper allocation of funds
- Act as a financial advisor to you and your employees
- Benchmark your plan to match your business growth
Some advisors may offer administrative services as well. When looking for an advisor, be sure your advisor can provide the services you need now and into the future.
Decide on a Provider
Designing a retirement plan means deciding on the specific features and corresponding rules for your plan. The plan's design should match the goals you set at the beginning of the process. Part of setting up the plan is finding the right provider for your 401(k) investment funds. That's why it is crucial to find the right 401(k) advisor who can help you design and implement a qualified retirement plan. Contact us for more information.