Consider This: Are You and Your Employees Prepared for Retirement?
According to the Bureau of Labor Statistics, only 60 million of 162 million people in the workforce are active 401(k) participants—that is only 37 percent of the workforce. Retirement is tricky, especially with increased life expectancy and the difficulty of keeping and finding a job after the coronavirus pandemic. Furthermore, Social Security benefits likely won’t cut the cheddar with the average monthly benefit for retired workers at approximately $1,657 in 2022.
Consider this: If you need up to 80 percent of your current income to retire, are you prepared?
As an employer, there are a number of benefits for both you and your employees when you offer a 401(k), including:
- Employers can receive tax credits and write-offs for fees. For example, companies with fewer than 100 employees may be eligible for up to $16,500 over 3 years, with incentives from the SECURE Act passed in late 2019 for establishing a 401(k).
- Employers can deduct contributions to employee accounts up to 25 percent of total wages or the annual cap.
- Employers save on payroll taxes for amounts contributed by employees.
- When there is lower turnover, there is less training.
- Retirement plans attract better employees and keep them, which, in turn, lowers training costs.
- The lower the costs, the more money to be spent on other wants and needs for the business.
Of course, 401(k) plans also benefit your employees:
- Money contributed to the employee’s 401(k) is pre-tax, lowering their taxable income.
- Employer contributions are also not taxed until they are withdrawn.
- Interest accumulates on the employee’s account, which helps a 401(k) grow.
- 401(k) plans are portable and can transfer from one job to the next.
- Employees increase their retirement security.
Are you looking to offer your employees a retirement plan but want to limit expense, fiduciary liability and time commitment? Alternatively, are you looking to find efficiencies in your current plan by outsourcing certain functions and responsibilities?
SOCA has developed a 401(k) pooled-employer plan to offer employees of all sizes an easy and affordable solution. Contact your ARC representative for more information about 401(k) pooled-employer plans and how they can benefit your business and your employees.
