If you plan to offer a small business 401k to offer to your employees, they'll love you for it. According to a survey in 2015, Glassdor,found 31 percent of employees would like to have a retirement plan at work, and 79 percent want additional benefits, rather than more money. Previous online surveys have also reported that a number of workers would leave for one with a 401k, if their current job does not offer one. While adding a retirement plan might help you retain good current employees and attract new ones, because many companies do not offer a retirement benefit anymore, you don't want a cookie cutter or one-size-fits-all plan. Here's why and how a professional 401K company can help.
The Retirement Planning Industry, Only an Expert Can Truly Help
Some small businesses hire a payroll company to help start a retirement plan, others hire a big bank. To do either can be a big mistake. Retirement planning is a specialized field, and only a professional 401k firm should help. A number of large payroll planners offer retirement planning services, but doing payroll quickly only means using the correct tax rates for the Federal, State, and Local Government, and a computerized system, and mistakes can easily be corrected. On the other hand, a big bank will offer plans that are similar from business to business, plans that don't take into consideration the goals of a local business owner, its employees, or the size of the business.
A professional 401k provider, like Life Inc., will customize a plan to meet the specific needs of an individual small business. We will weigh the pros and cons of specific plans, help curb costs to stay within your budget, and even help forecast your company's future growth and future workforce demographics.
We Will Help Ensure Your Plan Abides By Government Standards
Any retirement plan you offer has to abide by Department of Treasury regulations, the Internal Revenue Code, the Employee Retirement Income Security Act (ERISA), Department of Labor regulations, as well as fulfill all the terms of the plan document. An expert can ensure there will be no errors during the determination of eligibility and vesting, contribution deposits, trade processing, discrimination testing, and the preparation of Form 5500, used to used to file annual information concerning an employee benefit plan with the Department of Labor. Without using a professional, errors can occur daily.
If You Use a 401(k) Advisor, Establishing a Small Business Retirement Plan is Easy
It's easier today to start a 401(K) plan, because most plans are web-based. With the help of a professional, it will be simple to establish, administer, and maintain a 401(K) plan. Establishing a plan will require little time commitment and little or no paperwork. Your employees will be able to access their accounts 24 hours a day, and your employees can contact a retirement specialist easily by phone.
A Retirement Plan Will Help Your Business Save on Taxes
Your business will be eligible to receive a special $500 tax credit for the first three years of your new plan. Your business can receive additional deductions for contributing to the plan. You might even save on your personal taxes for contributing personally.
A 401(K) Plan Might Be Beneficial For Your Own Retirement
While small business owners work hard to help their companies succeed, they often don't plan adequately for their own retirement. They might hope to sell their business someday, but what if they don't?
With a 401(k) plan, as a small business owner, you can contribute up to $18,000 annually, or $24,000 if you are 50 or older. You can even make a profit sharing contribution.
Your Employees Won't Be Taxed Until They Take a Distribution
While your employees will receive earnings on their retirement investments, they won't be taxed until they withdraw--something they will find enticing. Even when they withdraw after 59 1/2, they won't pay the costly capital gains taxes--only taxes on funds. For this reason, if a professional helps you start a small business retirement plan, you can compete with larger business owners or corporations.
Let Us Help You Today
If you own a small business, are you thinking about starting a 401(k)-retirement savings plan Investopedia, reported only 40 percent of small business owners use an advisor. A professional can help you start a plan that fits your business. For more information, contact us today.