Around 75 percent of employers offer a 401(k) plan to their employees, and a good percentage offer contribution matching. For small business owners, however, most savings programs, including the 401(k), seem like they’re out of reach.
You may not think you should offer a 401(k) to your employees. After all, these plans can be quite complex, and you might be concerned it’ll be too expensive for your small business. Will your employees even use one?
You should probably consider offering your employees a plan anyway.
What are the benefits of a 401(k) plan?
These plans offer many benefits to business owners and employees alike. Employees are less likely to leave, and you’re more likely to find the right talent when you offer a plan. There are also financial incentives, since plans can help you save on taxes. They can even help you support your own retirement plans.
Still not convinced you need a 401(k) plan for your workforce? These five reasons should help change your mind.
1. A 401(k) Helps with Recruitment and Employee Retention
As already mentioned, offering a 401(k) plan helps you attract and retain the best employees. Employees who are offered a 401(k) are less likely to leave the company, and job seekers are more inclined to accept an offer from a company offering a plan.
If you’ve been hoping to reduce turnover or you’ve been having trouble attracting the right talent for your business, a 401(k) plan could help.
2. It Can Help You Plan for Retirement
Most business owners see a 401(k) plan as a way to help their employees plan for their retirement. What they don’t usually think of is how the same plan can help them plan for their own retirement.
Contributing to your company’s 401(k) plan is an excellent way to ensure you’re saving for your own retirement. Since business owners often don’t plan adequately in this regard, this is a huge help.
3. You Can Save on Small Business Taxes
Many business owners feel they can’t offer a 401(k) plan because it will cost them too much. This isn’t necessarily true. Many plans are quite affordable. You also don’t need to offer a contribution match program.
Another way to make plans more affordable is to take advantages of the tax breaks associated with them. Small businesses offering a 401(k) can take advantage of some tax incentives, which makes the plan more affordable.
4. Your Workers Will Appreciate It
Perhaps the best reason to offer a 401(k) plan to your employees is that they’ll appreciate it. Many Americans are concerned about how they’ll save for retirement, which is why employers who offer any type of retirement savings plans tend to attract and retain employees.
By offering your employees a 401(k) plan, you’re helping them plan for their futures and live their best lives.
5. It’s Less Complicated Than You Think
Another reason business owners choose not to offer a 401(k) is because they think the plan will be overly complicated or difficult to administer. This isn’t true. Many plans are quite simple and straightforward.
If you need help administering your plan, talk to the experts. They can help you make the right decisions as you offer your workforce the right 401(k) plan for them and your business.