Are you a small business owner that tends to shy away from offering a retirement plan? Although a retirement plan for your small business may seem complex and expensive, this is not necessarily the case.
Too many individuals in the United States, around 41 million employees, including business owners, work for a small business that doesn’t offer them any kind of retirement plan.
Don’t let fear or lack of knowledge let you become part of this statistic – starting a retirement plan for your business should be easy and beneficial to all.
Although there may be many reasons you are hesitant to set up a retirement plan for your small business including complex rules and regulations and high costs of a maintaining a plan, we are here to tell discuss five reasons why you should have a retirement plan.
- Fund you retirement nest egg faster than IRAs
Wouldn’t it be nice for you and your employees to reach your retirement goals quicker than your current method allows? An employee-sponsored retirement plan can help you do this.
- Tax deductions for contributions
Although you can choose a plan in which you do not have to contribute to your employees retirement plan, as an employer you receive a tax deduction when you make a contribution to a retirement account.
- Tax deferral of contributions and earnings
Contributions made to retirement accounts are not generally taxed until they are distributed. Additionally, the earnings grow on a tax-deferred basis.
- Attract high quality employees
An attractive retirement plan to offer potential employees will help you stand out from the crowd during the hiring process. Did you know only 14 percent of small businesses offer a retirement plan?
- $1,500 tax credit for plan startup costs
Did you know as business owner you may be eligible for a tax credit just for starting a retirement plan?
In the following weeks, we will cover each of these 5 reasons your small business should have a retirement plan in more detail. For now, remember, plans can be low cost and low stress.
Setting up an employer-sponsored retirement plan can be intimidating for those who are new to the field and unfamiliar with the features and benefits that apply to each, but with the right education and professional assistance, you can easily navigate this new aspect of your business.
Understanding the need for retirement planning and setting up a retirement plan for your small business is not only beneficial to you as a business owner but also encourages your employees to plan for the future and help them achieve their personal goals. Stay tuned to learn how a starting a retirement plan for your small business can create more growth than your typical IRA.
