A recently published study found that less than half of small businesses with under fifty employees provide their staff with a retirement plan. The survey also revealed that among businesses that employed more than 100 employees, however, retirement plans were available to 90% of employees. If you aren’t yet offering a retirement plan for your employees, there are many reasons why you should consider doing so.
Here are four reasons why big business and small business retirement plans are a good option for all business owners:
You get to secure your retirement:
You may believe that you don’t need a safety-net because your business gives you the security you need. However, thinking like this can be a huge mistake. The marketplace continually changes, which can lower the value of the business at any moment. When it finally comes time to sell your company for the money that you need to retire, you may find that you don’t always get the Return on Investment (ROI) you hoped for all these years.
Your employees stay on for longer:
Studies have long indicated that employees gravitate to companies that offer retirement benefits. For instance, a Willis Towers Watson survey has revealed that one in three employees consider retirement benefits to be a critical reason to accept a position.
When an employer offers a qualified retirement plan to employees, it allows them to save with tax advantages. Your employees may benefit from tax credits for the amount they contribute to their retirement plan. Employers also receive tax benefits – when an employer matches an employee’s contribution, it is fully tax-deductible. Many employers even receive tax credits for matching.
Obtaining a tax credit when you set up a plan
When you set up a new retirement plan for your small business of fewer than 100 employees, there is a tax credit that could benefit your business. These credits can also be used towards your pension plan, 401(k)s, and other types of retirement plans. The tax credit has a cap of $500 or up to 50% of the initial costs to activate the retirement plan. You can claim for up to three years.
Businesses can have a hard time managing the different demands on their limited resources. From managing pay raises to buying new equipment and funding the marketing department, there are quite a few back-office responsibilities that businesses must keep up with regularly. It might seem as if managing retirement funds is a new and unnecessary burden. In reality, however, doing this can help take a business that much further.
Please be sure to reach out to the StaffScapes team with any additional questions you might have. We are confident that we can provide your business with the services it needs in order to reach new levels of success. We’d love the opportunity to assess where you are today and where we can go together. For further information, click here to schedule a consultation with one of our PEO specialist.
We look forward to connecting with you!