Attracting and keeping top talent is easier when you offer a competitive salary and health benefits. But don’t overlook another opportunity to boost employee interest and retention: adding a retirement savings plan like a 401(k) or multiple employer plan (MEP) to your employee benefits package. Here are just a few of the reasons taking this step benefits employees and your business.
1. In-Demand Benefits Attract Top Talent
Job seekers often prioritize retirement benefits when evaluating potential employers, viewing a retirement savings plan as essential to their overall compensation package. Offering a well-structured plan with employer-matching contributions demonstrates your commitment to employees’ long-term financial security and helps you build a satisfied, loyal workforce.
2. Tax Advantages
Both employees and employers can benefit from tax advantages through some retirement plans like a 401(k) plan. For example, contributions to a traditional 401(k) are made on a pre-tax basis, reducing employees’ taxable income and potentially lowering their annual tax bill. And employers may qualify for tax deductions or credits associated with offering retirement benefits. Discussing your options with a trusted accountant or other financial advisor is a good first step.
3. Employee Financial Security
Encouraging employees to save for retirement promotes financial security and peace of mind. Automatic payroll deductions make saving easy and convenient, fostering a habit of regular saving and investment. And employees who feel financially secure are likely to be more focused and productive at work because they’re less distracted by financial worries. Consider going the extra mile by providing employees with educational resources or access to professional training on personal financial planning and retirement savings.
What are Your Options for Retirement Savings Plans?
There are many types of retirement savings plans to choose from. Here is a list from the IRS with links to learn more:
Individual Retirement Arrangements (IRAs)
Roth IRAs
401(k) Plans
SIMPLE 401(k) Plans
403(b) Plans
SIMPLE IRA Plans (Savings Incentive Match Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified Employee Pension)
Payroll Deduction IRAs
Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)
Governmental Plans
457 Plans
Multiple Employer Plans
Help with Choosing a Retirement Plan
Interested in Implementing a Retirement Savings Plan?
If you’re interested in implementing a retirement savings plan but don’t know how or are worried about the administrative responsibilities and costs, here’s something to consider: Clients of the employEZ family of PEOs can access the employEZ Retirement Savings Plan. This plan allows you and your employees to contribute to the type of 401(k) plan today’s largest businesses offer, while easing the administrative burdens, fiduciary risk, and expense of establishing a quality program on your own.
