Offering a 401(k) allows employees to deposit a percentage of their income into an account and some employers also contribute to the account. Although adding employment benefits has obvious benefits for your employees, such as a culture of support, this retirement plan also provides a number of financial and social advantages for your business.
To acquire highly talented individuals, it’s helpful to offer perks that your competitors do not. In a time when people are questioning the longevity of social security, a 401(k) plan can seem enticing to young professionals who seek financial stability for the future. This can help find top talent in your industry and keep them loyal to your business.
Showing you value your employees with this plan can boost employee satisfaction, which is an important part of maximizing overall productivity. When employees feel like they’re working toward something and their company genuinely cares about them, they are likely to put forth more effort. This may also reduce your turnover rate and lay down the foundation for a loyal workforce.
Businesses can also take advantage of tax deductions when offering this plan. In some cases, this can offset most or all of the set-up fees you accrue. Any incurred costs can be deducted at tax time. Matching your employees’ contributions isn’t mandatory, but it is smart to do so if your business is stable. Since company contributions are tax deductible, you can help your employees while getting significant tax breaks yourself.
Generally, there is an initial setup and maintenance fee, which can be paid monthly or annually. To avoid overspending, know what the common costs are. Knowing these numbers should give you an idea of how a prospective plan matches up with others.It can be helpful to seek guidance from a financial institution.
Writing of a 401(k) plan document, arranging a trust fund, choosing a record-keeping system, and gathering information to distribute to qualified employees are important steps a business must take to implement their 401(k) program.
Some people believe 401(k) plans are for large businesses only, however they can be used by smaller ones as well. Getting set up can take time and research, but it’s worth the effort to build a strong foundation for your business. 401(k)s will help bring your business to the next level and keep you competitive within your industry.
About The Rubin Group
Based in New York, The Rubin Group provides insurance in most of the 50 states. Our full-service insurance brokerage provides insurance and risk management services to individuals in all income brackets and businesses of all sizes and types. We understand that every client has unique coverage requirements, and we are passionate about providing the ideal individualized coverage for each customer. Each member of our team takes the time to truly understand your situation, the particular risks you anticipate – and the very real risks you’ve not yet contemplated. For all of your insurance needs, contact us at The Rubin Group!