Retirement Plans to Offer Your Employees
While actual retirement may be decades away for some of your employees, it’s not too early for them to begin saving for their future. Most of the responsibility falls to the employee when it comes to putting money away. However, to entice the right talent and keep them happy throughout the years, employers <should> think about <offering> some of the following programs and we can help with some free quotes:
“Defined Benefit” Plan
This plan offers benefits to an employee upon retirement. Length of employment and salary
are contributing factors when it comes to the amount. The owner of the business assumes
responsibility of the fixed rate set forth by the government. While there doesn’t seem to
be much flexibility with the defined benefit plan, as with other retirement benefits, it’s an
attractive option for employees because the benefits are guaranteed.
An employer can also contribute more money than any other plan, which can earn them
greater tax advantages. Since the defined benefit plan varies from other retirement
programs, it can be combined with other plans such as the SEP IRA and Solo 401(k). In
addition to the pros, cons such as payout limits and high costs can be associated with the
defined benefit retirement plan.
A 401(k) can be a powerful tool when you’re looking to hire employees. The participants
involved in the program can decide, on their own, how much they would like to contribute
each paycheck. For an individual at the early stages of their career, they may want to have a
smaller portion deducted than someone who is closer to retirement.
Through the various stocks and investments, the money contributed may grow. The
contributions that are made are not taxed by the state or Federal governments. If an
employee decides to leave, a 401(k) gives them the chance to take that money along with
them to another employer.
Simple IRA Plan
When it comes to a simple IRA plan, filling out the form to begin is a breeze. Whether you
let your employees decide where they would like to invest their money, or you select the
institution on your own, the program is also inexpensive to start up and maintain. The year-
end paperwork is also a dream to keep track of, if you’re an employer.
Unlike the Roth IRA, the simple <IRA> plan allows for a higher contribution rate, plus a
catch-up clause for individuals over the age of 50. Money that you place into the account is
also tax deductible. However, this type of program is limited to the smaller businesses who
house under 100 employees. If the employee withdraws their money early, they could also
incur strict penalties by as much as 10 percent.
SEP IRA Plan
Simplified Employee Pensions (SEP) IRA programs are another popular retirement option to
offer. In addition to being easy to set up and maintain throughout the years, you’ll find the
plan tax deductible. Employers also make all of the contributions, so your employees don’t
have to worry about parting with their own money.
While it can be a great plan to entice the best talent, you have to remember that all
employees must be included. You also have to pay the same percentages as you would for
Saving for retirement may not be on the mind of all of your employees. However, watching
the money grow and knowing that you’re helping them to enjoy a more financially
comfortable future can prove beneficial to everyone.