Rethinking 401(k)s: A Gateway for Small Businesses
Nick Tobiasz

Rethinking Retirement Plans for Small Businesses

For a long time, the prevailing belief was that 401(k) plans were too complex or expensive for small businesses. Many business owners felt overwhelmed with balancing the daily operations of their business with managing employee benefits. However, recent changes, particularly under SECURE 2.0, have transformed retirement plans into a much more accessible and beneficial option for small businesses and their employees alike. It's time to let go of outdated notions and explore what's possible in today's market.

Attract Talent and Lower Taxes

  • A well-designed 401(k) plan not only helps attract and retain top talent but also offers tax benefits. Business owners can decrease their taxable income since plan expenses and employer contributions are tax-deductible.
  • Additionally, businesses with up to 100 employees may qualify for up to $5,000 per year in tax credits for plan startup costs for the first three years, thanks to recent regulatory changes.

Boost Participation with Auto-Enrollment

Gone are the days of low participation rates. With auto-enrollment now standard in most new 401(k) plans, participation among employees is notably higher, ensuring that more individuals are on a path to a secure retirement.

More Small Businesses are Adopting Retirement Plans

While fewer than one in four small businesses currently offer a 401(k), this number is steadily increasing. More businesses are starting to recognize the competitive edge that offering a retirement plan can provide.

Flexible and Affordable Options

  • There are now more flexible and affordable retirement plan options available than ever before. The time has never been better for small businesses to develop long-term strategies for employee retention and satisfaction.
  • Moreover, an additional credit of up to $1,000 per employee may be available for employer contributions, offering even more financial incentive to embrace a 401(k) plan.

No Longer a Burden

The administrative and financial burdens traditionally associated with 401(k) plans have been significantly reduced. Offering such a plan is well within reach for today's small businesses.

If you're interested in staying competitive and attracting top talent, explore your 401(k) options now. Speak with a financial or benefits advisor to create a plan that meets your unique needs.