Every business owner has the dream to run a profitable, successful business. For employees to excel, be productive and flourish in the workplace, they need to feel like a valued member of the team—which starts by providing employees with excellent benefits, including retirement plan options.
401K plans are the most popular employee retirement plan benefit, and can be a powerful tool in promoting financial security in retirement. Many employers are surprised by how easy it can be to implement a retirement plan for their business when you team up with the right professionals. Keep reading to learn more about the importance of providing great 401K options to employees and their families.
Enhance employee morale
Showing that you value your employees and their dedication to your company with a retirement plan can greatly boost morale. Keeping your workforce happy is an important part of maximizing productivity, keeping your business on a path to success.
Improve employee recruitment and retention rate
The more you show your employees you care about their future, the more likely they are to stay at your company. In addition to retaining employees, offering great retirement perks can help your company recruit highly talented individuals.
“Providing a respectable retirement plan for your employees can help your business attract and retain the type of talent you are looking for,” explains Two Rivers Bank & Trust Vice President Brett Bessine.
In a time when people are questioning the longevity of social security, a 401K plan will allow your employees to feel good about their future, as well as entice professionals to build a career with your business.
Receive tax advantages
Businesses that offer 401K options to their employees are eligible to receive a variety of tax deductions. According to Sharebuilder 401K, companies that have less than 100 employees, and provide a 401K retirement plan, may qualify for a $500 tax credit for the first three years of running their retirement plan—that’s $1,500 over the first three years to offset any startup or administrative costs that might have occurred.
“Businesses that offer retirement plans are also eligible to receive additional opportunities for tax savings,” says Bessine. “Companies that offer a match to their employees’ 401K contributions are able to deduct those matching contributions from their taxes—so you’re not only helping your employees plan for their future, but you’re also helping your business succeed, as well.”
You can use the plan
As a business owner, your 401K plan is not just for your employees—you can contribute to your own plan, as well. This means that you will receive the same 401K benefits as your employees, including matching percentages and deferral contribution limits. So, while you’re helping your employees save for their futures, you’re also saving for your own—it’s a win-win.
Whether you’re looking to provide employees with a 401K retirement plan, SEP or a Simple IRA, Two Rivers Bank & Trust has the expertise and financial experience to help you and your employees maximize the benefits of offering a retirement plan. Prepare your employees for financial success, and contact us today to learn more.