Providing a retirement plan is one of the best ways to attract and retain employees for a small business. Without a retirement plan, the owner and the employee are leaving a big part of their financial future into a question mark. Other than providing an important source for retirement savings, offering retirement plans for small business can provide various benefits.
The costs of executing retirement plans for the small business are fully deductible on the company tax return. Various small business retirement plans include SEP IRA, Cash-Balance Plans, 401(k) plan and more. The contributions made by the company for the employee’s retirement plan are also deductible. Every business owner must make sure that all the qualified employees should be provided with the opportunity to participate in the retirement plan.
The employees of the company can also benefit reduction in their annual income tax bills if their retirement plans defer a portion of their earnings into their retirement accounts.
Most business owners feel it difficult to attract and retain quality employees. A retirement plan with various useful features can help employee retention. Large corporations offer a 401k plan that needs employer matching contributions. Getting help from a 401k plan administrator will help you to stay in compliance with ERISA, DOL and IRS regulations. By offering the best retirement plans with potentially better benefits that are offered by large companies, the small business owners can keep their good employees with them.