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.
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The U.S. unemployment rate just dropped to 3.9%, a level not seen since the year 2000. While this is definitely good news, it also creates small business hiring challenges. Attracting top talent is hard enough, but it is even tougher in this kind of a marketplace, where nearly everyone who wants a job has one. So as a small business owner, you have to come up with innovative ways to recruit talented people. One way to do this is by offering a robust 401k retirement plan from a 401k company.
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If you own a small business, you want it to be successful. Naturally, you need good employees to work for you to make that happen. To attract the best talent for your company, you need to provide more than just good salaries and bonuses. It is critical that you also offer a 401(k)-retirement plan, if you want the best potential employees to consider your company, rather than a competitor.
With people living longer than they used to, it is more important than ever that people start saving for retirement as early as possible. However, many people who work at small businesses do not have access to a 401k plan, as only 15% of businesses with 100 employees or less offer their employees retirement plans, and only 50% of Americans overall have access to a workplace retirement plan. Generally, small business owners do not want to offer a 401k plan due to the time and money they would have to invest to offer these benefits. While this is a valid concern, the fact is that the pros outweigh the cons of offering your employees a 401k plan. Here are just a few of the benefits you could gain by offering a 401k plan to your employees.
For businesses with less than 25 employees, the allure of adopting a SIMPLE IRA as their employer-sponsored retirement plan is very tempting. Simple to set up – just set up an IRA for each eligible employee; and there is no administration. The required matching contribution is only 3 percent, and only on actual salary deferrals.
For some time the conventional wisdom has been that adopting 401k plans is too expensive and too cumbersome for the smaller business scale. Chief among the more onerous requirements had been the nondiscrimination compliance testing for contribution and compensation limits.