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4 Reasons to Offer 401(k) at Your Small Business

Companies and employees both are always on the lookout for new benefits and savings options. For companies, they provide a way of overtaking their competition and attracting top talent. For employees, they provide necessary financial assistance in everything from insurance to savings.

Retirement savings is one such benefit that many small companies may overlook, but it’s also one that every employee hopes to receive. Retirement is something everyone is working toward one day, so it’s incredibly beneficial to have plan options that provide you and your employees with both assistance and peace of mind.

For more information about 401(k)s or to receive a quote, contact Beckham Insurance Group today.

What is a 401(k)?

Originating from the section of tax code under the same name, a 401(k) is a specific type of retirement savings that employees can receive from their employers. It consists of a plan wherein employees can contribute money toward their savings by having automatic deductions pulled from their paychecks. There are many benefits associated with 401(k)s, and they’re not just for your employees.

Reasons to Offer a 401(k)

There are so many reasons why offering a 401(k) plan is a good move for your business whether you’re a smaller brand or a large corporation. From attracting and retaining top talent to increasing productivity, aiding employees’ retirement funds, and earning tax advantages, let’s take a look at a few of the top benefits of offering a 401(k) plan.

Attract and Retain Top Employees

Today, individuals consider much more than a paycheck when looking for a new job. They want to make sure they’re also going to be receiving benefits like health insurance, paid time off and family leave, and retirement plans. By offering a 401(k) option, you can set your company apart from the competition.

This kind of retirement savings plan lets employees work toward their future with help from your company which not only makes you a more attractive employer for new hires but also promotes company loyalty in your current staff. They’ll see that you genuinely care about their wellbeing and happiness even after they leave you company because of how you’ve worked with them to develop their savings for a time when they’ll no longer be working for you.

Increases Employee Productivity and Mental Health

Because your employees will see that you care about their wellbeing in offering a 401(k) program, they will likely become much more productive in the workplace. Employees are facing incredible amounts of finance-related stress in their lives, and a great deal of that strain comes from fears about their futures. By providing employees with an affordable, safe retirement plan option that they can actively grow, you help them to worry less about the future and focus more on their day-to-day functions, thereby increasing both their productivity in the workplace and their general mental health.

Tax Advantages

Everyone loves a great benefit, from the newest employee to the highest-ranking CEO, so it’s no surprise that one of the most popular benefits 401(k)s provide companies and employees both is its high potential for tax advantages.

Companies may qualify for tax credits of up to $500 per year for the first three years they offer the 401(k) program to cover startup costs. And, for those employers who chose to contribute to their employees’ plans, additional tax breaks are available as all company matches are tax-deductible.

For employees, contributing to their 401(k)s can significantly reduce their income taxes each year. This is because money put towards a traditional 401(k) plan is withdrawn from paychecks before taxes are deducted. This means that more money goes into an account holder’s 401(k) and more money stays in their wallet upfront. Additionally, once money is placed in a 401(k), individuals don’t have to pay taxes or investment growth fees on anything while the account is being contributed to–this means no taxes on interest fees, dividends, or investment gains until account holders begin withdrawing money from the 401(k) upon their retirement.

401(k)’s are Easy to Maintain

For any new benefit you may offer, the time and energy you put into it must make it worth the effort. Fortunately, 401(k)s are very straightforward and easy to manage. Many plan types come equipped with technology including automated processes that greatly reduce the amount of time you and your administrators need to put in when working on these plan types. And, with more systems digitizing, modern 401(k) plans often provide you and your employees with the resources to access their accounts online at any time on any day.

Employee Benefits Made Easy

At Beckham Insurance Group, our knowledgeable and experienced employee benefits representatives are here to help make your benefits administration as easy and stress-free as possible. Contact us today to learn more about how we can help you build a competitive and comprehensive benefits program.

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