Retirement benefits are among the best known and most desirable employee benefits offered. So why don’t more businesses offer them?
Not all tools are right for every situation, but there also can be a lot of misunderstandings about complex company-sponsored benefits. Owners who are leery of getting in over their head or who aren’t sure if the effort will be worth it may hesitate to make such a big change. If you like the idea of offering retirement benefits but aren’t sure where to start, ask yourself:
Will it provide a recruiting or retention edge; and what is that worth?
In a tight labor market, many businesses struggle to hire and keep good people. A retirement plan can help you stand out from the competition or keep an employee from walking (especially with options that reward longevity). Depending on how hard it is for you to find good people, this could tip the scales.
How will a retirement benefit affect my bottom line?
Nothing in life is free, but some things are a better value. That includes retirement plans. Your business could benefit from tax advantages the government offers to encourage more employers to provide retirement benefits. And business contributions to employee retirement are tax-advantaged, which can help your business come tax time.
What kind of plan makes the most sense for my business?
401(k), SIMPLE IRA, SEP – it’s a regular alphabet soup. But behind all those acronyms and numbers, each option offers unique features, benefits, and opportunities – more than can be explained in a few words. Talk to an expert who can help you understand, unravel, and evaluate your options, which are probably more extensive than you realize.
What will it take to offer and manage a plan?
You’ve got a lot on your plate, so figure out how a retirement plan fits. Maybe your business has a person who can manage the plan, or maybe they’ll need training. Do you run everything yourself? A benefits partner can handle administration, communications, enrollment, and support for a reasonable cost.
There are lots of reasons to offer retirement benefits, not just including the help it provides your valued employees to prepare for a solid future.
With the right guidance, you may find that offering a retirement plan makes more sense than you would expect.
The information contained herein is general in nature, is provided for informational purposes only and not intended to provide legal or tax advice or recommendations for any particular situation or type of retirement plan. Alerus does not provide legal or tax advice. Always consult your legal or tax advisor regarding your unique situation.