Everyone wants to retire at some point or another. Some want to retire sooner rather than later. As such, it's important to consider 401k for business owners. If you're a small business, you want to think about how you can retire when you're ready. Additionally, you want to be able to attract top talent – and that means offering them the best 401k providers, too.
Why It's a Must
One of the main reasons why you have to consider retirement plans for a small business is because it's an employee benefit. More and more people are considering retirement at earlier ages. It's not simply for those who are married, either. Even younger millennials are looking at what kinds of retirement benefits are offered.
When you're looking to hire the best employees, you need to look at what benefits you're providing. This goes way beyond the health insurance that you might offer. A 401k is a chance for you to offer retirement benefits and also contribute. Even if you can only afford to match a small percentage, it's something to tell employees that you care about them and their future.
Consider what Harvard Business Review has to say about what benefits job seekers value the most.
Any Business Can Offer Retirement Plans
Don't assume that you can't offer a retirement plan because your business is too small. You'd be surprised that there are many small business 401k plans out there. By exploring the options, you will learn that there are even solo-40k solutions so you can even choose to get a 401k just for you as the owner.
This means that you can get started as soon as you go into business for yourself. Then, as you add employees, you can always choose to add them into the plan, too.
There are Tax Benefits
As you work with a 401k expert as well as a third-party administrator, you can explore all of the benefits of small business retirement plans. For example, you can enjoy tax credits from the government for the first three years as a way to offset some of the costs of the plan.
Administration costs are going to vary based on how many participants you have within your company. Opting for a 10-participant company may result in only $1000 per year for administration costs. Additionally, the tax credits from the government may be up to half of this amount.
Another benefit that you may not be aware of is that you will encounter personal tax benefits. The amount that you contribute to your 401okay is not part of your taxable income, thus reducing the amount that you are taxed on at the end of every year.
Choosing to Start a 401k
It doesn't matter how large or small your business is. Whether you are in business for yourself or you have several employees, you will want to consider retirement – and a retirement plan to assist you with all of your goals. Eventually, you will want to grow your business. This will mean having to hire employees. Top talent is regularly attracted to businesses that offer some kind of 401k plan.
It's a good idea to get a discussion started with a 401k advisor. You can learn about the various options that are available to you based upon the size of your business. You can choose whether you want to contribute towards employee 401k plans or simply offer them the ability to contribute towards their own plan.
When you want to learn more about how to start a 401k plan for a business contact us at Life, Inc. Retirement Services. We can provide you with local assistance, including affordable plan options.