A wide array of business retirement plans are available that benefit you at tax time. While the plans vary subtly in the tax benefits they provide, what we’re generally looking at is some combination of tax-deductible contributions, tax-deferred growth, and (in the case of Roth contributions), potential tax-free withdrawals.
401(k) Retirement Plans
An employer-sponsored retirement plan that allows employees to add pre-taxed income to a retirement savings account. The funds will be taxed, however, once the employee makes a withdrawal from the account. Oftentimes, employers will also make contributions to the employee’s 401(k). 401(k)s are portable, so when an employee moves jobs their retirement account will go with them.
Gain a solid understanding of basic retirement plan design principles and parameters to effectively manage plan costs and decide on a plan that works for your business. There are four main considerations when it comes to choosing a retirement plan: Competitive bidding, plan automation, plan design, and cost considerations.
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.
Small businesses are undergoing a major shift in the business landscape, which is prompting them to reassess their future. Getting ready for retirement involves thorough planning, assessing available retirement options, and taking ownership of your finances. A recently passed law, known as Secure 2.0, is providing a number of changes that could help strengthen the retirement system for small businesses and their employees in the United States.
Although retirement planning may not always be a high priority for busy small business owners, there are plenty of options available to help you start saving for the future. Read on for an overview of common workplace-based plans.