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Benefits of facilitating retirement savings

Many small employers want to facilitate and offer retirement savings for their employees, but it can be daunting and time-consuming to sort through the available options. However, a number of changes in the marketplaces are making it easier and more affordable for small businesses to offer a retirement plan. We’ve outlined the top benefits of facilitating retirement savings for small employers, and some key tips and considerations to help you navigate your options.

Affordable options now available

Historically, small business retirement plans have had higher costs, but that’s changing. Technology companies and traditional 401(k) companies have been innovating to provide flat administration fees, and overall, investment fees are trending down. What’s more, outside of traditional 401(k) plans, SEP, SIMPLE and payroll-deducted IRA plans carry low setup fees and offer a variety of investment options that can work for even the smallest businesses.

You don’t have to provide a company match

This can be a big concern for employers who are not sure what is and what is not required in terms of company match contributions. There are plenty of plan options available that don’t require employers to match retirement contributions. Even if you choose to offer a plan that includes a company match, you still have control over how much you contribute. Many plans include discretionary matching contributions, meaning you can contribute a match only when it is affordable and comfortable for your bottom line.

Choose a flexible retirement plan

Unstable business cycles shouldn’t prevent you from facilitating access to retirement savings for your employees. While this can be a concern, many retirement plans are now designed for businesses with fluctuating incomes. You can choose plans with low administrative costs and simple contribution structures, such as a SIMPLE or SEP plan.

Keep your own retirement goals in mind

Many small business owners view their business as their biggest asset, but establishing a retirement plan for both you and your employees can help you create new retirement streams and diversify your assets to avoid putting all of your eggs in one basket.

Gain a competitive advantage through your benefits’ package

Offering essential benefits such as retirement savings can help small employers compete with larger businesses for a talented workforce, giving you a competitive advantage to help attract and retain employees. By facilitating this key benefit, you can help your employees save for the future, build financial security, and save on reduced employee turnover and increased morale.

Tax credits for plan startup

A recently passed law, known as Secure 2.0, is providing a number of changes that help strengthen the retirement system for small businesses and their employees in the United States. Major changes include an expansion to tax credits for businesses with a new plan, matching contributions for employees, expansion of plan eligibility for part-time employees, and much more.