Rethinking 401(k) Plans for Small Businesses

Running a small business is no small feat, especially when it comes to juggling employee benefits and your budget. Historically, many have perceived 401(k) plans as too complex or expensive for smaller operations. However, it's time to reassess this outdated notion in light of recent changes under SECURE 2.0, making retirement plans more accessible, affordable, and beneficial for both employers and employees.

Why Small Businesses Should Consider 401(k)s

- While fewer than one in four small businesses currently offer a 401(k), this number is on the rise. - Businesses with up to 100 employees might qualify for up to $5,000 per year in tax credits for plan startup costs over the first three years. - Employees must have earned at least $5,000 in the previous year to qualify for these plans.

The Benefits of Modern 401(k) Plans

- An additional tax credit of up to $1,000 per employee is available for employer contributions. - Auto-enrollment is now standard for most new 401(k) plans, significantly boosting participation rates. - A well-designed plan can help attract and retain top talent while reducing taxable income, with plan expenses and employer contributions being tax-deductible.

Making 401(k)s More Accessible

With more flexible and affordable options than ever, now might be the perfect time to consider offering a retirement plan. It's important to realize that offering a 401(k) no longer has to be an overwhelming administrative or financial burden for small businesses.

A Call to Action

To stay competitive in attracting and retaining talent, it's crucial to explore today’s 401(k) plan options. We encourage you to speak with a financial or benefits advisor to tailor a plan that meets your unique business needs.