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.
Retirement Services & Financial Advisors - Serving Columbus & Beyond
One of the best ways to make your employees happy and less likely to leave your company and take another job may be to offer a small business retirement plan. In fact, nearly half of American families have no retirement savings account, even though the average retirement savings of American families is $95,776. That number can be deceptive because the median amount of savings for families is just $5,000--hardly enough for a healthy retirement. That counts those with savings and those without. The median amount for those with savings is $60,000. It's no wonder many American employees surveyed have said they would leave their job that has no retirement plan if they had a chance take one with a good plan. Other reasons to offer a plan include the tax savings for business owners and retirement advantages for them.
Sometimes sage old advice--to include the claim that small businesses can't afford to offer retirement plans--is just old advice.
In an economy where GDP growth is on pace for a 13-year high, unemployment is at an 18-year low, and consumer confidence is at a 15-year high, you don't need to be a publicly traded corporation to offer retirement plans to your workers. Better yet, you don't need to hire a publicly traded corporation to administer a retirement plan for your workers. And in fact, to grow out of small business status, a retirement plan is exactly what's needed.
Life, Inc. Retirement Services is here to help.
Times Change - Change With Them
When times are good, employers in all industries compete for workers. And they compete by luring them in with higher wages and better benefits. Higher wages can lead to wage inflation, which increases the costs of products or services because the added costs of production are passed on to consumers. This benefits employers about as much as it benefits workers: none. Unless wage inflation increases in tandem with productivity, the employer takes a hit to profits and the workers pay more for goods and services elsewhere in the marketplace.
Why does this matter to a small business owner? Because in a world that is always changing--a world where conventional wisdom is only wise for as long as it takes the daily news cycle to make it unoriginal--there's another option.
Boost Retirement, Not Wages
Instead of contributing to wage inflation, employers can instead choose to invest in their workers. For small businesses that are starting to feel the tax burden of being successful, there's a built-in perk of offering retirement plans to workers: employer contributions are tax deductible. On top of that, the IRS offers tax incentives for small businesses just starting out with a retirement plan for their workforce. And best of all, the money employers contribute stays with the plan if the employees leave. Called "vesting," this conditional contribution stays with long-term employees only, which incentivizes longevity and thus slows turnover and saves companies on hiring and training costs.
Don't Settle for Cookie-Cutter Plans
Dunkin' Donuts doesn't have the same mission, workforce, or even product as Carl's Kitchen Cabinets, and yet most big banks or payroll services will offer 401(k) plans that are indistinguishable from company to company. It's important to recognize that in today's economy, retirement planning is not an exclusive, one-vendor industry. Don't think that you have to settle for a one-size-fits-all plan just because you're small, new, or inexperienced in dealing with retirement plan options.
Our goal to "keep it simple" doesn't mean that you have to accept a retirement plan that's generic. On the contrary. At Life, Inc. we achieve exemplary customer satisfaction not by offering the same cookie-cutter retirement plans that the big banks hoist on unknowing customers, but by customizing a plan to meet your specific needs. This includes tweaking participation parameters to curb costs, adjusting vesting schedules, weighing the pros and cons of safe harbor plans, and even forecasting future workforce demographics and the effects of projected company growth. The point of offering a retirement plan isn't just to use it as a recruiting tool, though that is definitely part of ti. It's about offering a benefit that actually works, that achieves maximum saving for employees, that takes advantage of all available tax advantages, and that also boosts employee longevity.
If you're considering a retirement plan for your small business, don't settle for a quote-unquote "no frills" one-size-fits-all plan that's created to maximize their profit instead of your needs.
Choose a plan that is custom designed specifically to your industry, size, and growth model.
Choose a team of real people with real phones on their desks, not 800 numbers with automated self-help menus.
Choose Life, Inc. Retirement Services.
Contact us today to learn more.
With the average Social Security check just $1,404 per month in 2018, starting a small business 401k retirement plan is a great way to help your employees secure their financial future. It also increases employee loyalty by demonstrating that you care about your worker's financial well being. Another big benefit is that a small company 401k offers tax advantages for both you and your employees.
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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.
Small business owners often find themselves in a difficult position when it comes to offering employee retirement plans. Lack of information and assumption can cost them the opportunity to give their employees the chance to have a valuable benefit that could end up serving the needs of the business quite well.
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.