As a small business owner, you may feel that sponsoring a 401(k) plan may not be beneficial in relation to the costs and time that go into owning one. Well if this is how you feel – don’t.
Offering your employees a 401(k) can have many benefits for you and your employees, and with SaveDay, you don’t have to worry about fees or management.
Use a 401(k) To Recruit and Retain Employees
Offering a 401(k) plan as part of your benefits package can do wonders for your recruiting and retainment. While many startups like to offer unique benefits and perks such as game rooms and on-tap kombucha to attract top-talent, these aren’t the type of benefits that will keep employees.
Employees want to know that their employer is committed to them in the long-run and is serious about their relationship with them. As a long-term investment, offering a 401(k) in your benefits package is a great way to exemplify this. This will show that you not only mean business, but you care about their financial future as well.
Going a step further and offering a strong match can be a great way to decrease turnover, which can be a dealbreaker for many employees who may be presented with other opportunities. In going the extra mile to match contributions, you will illustrate the deeper commitment you have to your employees and will make them feel more valued.
In addition to improving recruiting and retainment, you may also see an increase in morale and productivity in the workplace.
401(k) Tax Breaks and Deductions
The 2019 SECURE Act has made it especially incentivizing for eligible small businesses to offer 401(k) plans. Small businesses that decide to open a 401(k) plan may qualify for up to $5,500 in tax credits for the setup and administration costs associated with it, as well as for adding an automatic enrollment feature.
Aside from tax credits, you may also benefit from tax deductions if you match employee contributions. As a small business, the employee 401(k) contributions you match could possibly be qualified as an ordinary business expense. If this is the case, then this would make your contributions tax-deductible.
Aside from the fact that almost half of working Americans didn’t have an employer-provided retirement savings plan prior to the pandemic, these reasons should more than enough of a motivator to provide a 401(k). Ready to get started? Contact us today to open a $0 cost 401(k) plan.
Photo by Christina Morillo on Pexels