Helping your employees save for retirement not only makes it easier to recruit new staff members but also boosts the financial security of your staff. This may help make employees feel more motivated and settled at work. A 401(k) package is a common and efficient way to help employees save. Here are some of the benefits of offering a 401(k):
- May help attract and retain staff.
- Matched contributions are tax-deductible.
- Can be used to incentivize employee performance.
Named after the relevant tax code, a 401(k) is a way for your employees to put part of their salary into a retirement savings plan where it’s invested. Usually, this money isn’t taxed as income now. Instead, the tax is paid when they withdraw the money later in life. Plans that work the other way around are known as Roth 401(k).
Businesses may allow employees to put portions of their salary into a 401(k), but to make a plan more attractive, many employers will offer to match the amount with an additional payment. Usually, this money can’t be withdrawn until the employee has been with the company for a certain period of time, so it’s an effective way to retain staff.
If you’re interested in offering your employees a 401(k) package, contact us to go over your options.