People of all ages are well aware of the need to save for retirement. They are also mostly well informed of the worries about Social Security and the decline of pension plans to help fund a stable retirement. Because of this, prospective employees consider an Employer-Sponsored Retirement Plan a significant benefit. Your ability to attract and retain the best talent can be severely handicapped without such a benefit. A decision to join your company may hinge on how your plan compares to the competition.
Employer-Sponsored Retirement Plans also help keep employees. Your plan can be tailored to allow for matching contributions into the employee accounts and can be vested by the employees on percentage earned based on years of service. Many employees build up sizable retirement savings that they highly value, knowing the longer they stay, the larger their retirement account becomes.
Employer-Sponsored Plans, such as 401(k) plans, have been around for many years. At the outset, they were very expensive and usually only able to be offered by large companies—those that could afford the costs and handle the administration. Now, however, internet-based plans have dramatically lowered costs and made it easy and practical for businesses of any size to sponsor and maintain an employer-sponsored 401(k) plan.
Employers are also eligible for some tax benefits such as credits for offering a plan. These benefits are dependent on the type of plan and a qualified tax advisor should be consulted.
Not only employees, but small business owners can also benefit from sponsoring a plan. Many owners have very little time to worry about their own financial prospects and a retirement date that is well off in the future. A 401(k) plan can assist in relieving the worry about building a retirement nest egg.
Still have more questions about implementing a company retirement plan? Contact Geier Financial online or call (410) 824-1853 to speak with one of our retirement experts.