Plain and Simple: Bright Business Insights Spring 2019 | Page 6

SHOULD YOU OFFER A 401(K) PLAN?
Hint: The Answer Is ‘Yes’
Offering a 401(k) retirement savings plan is one of the most
beneficial things you can do for your employees and your business.
This benefit helps attract new employees, improve morale with
Notably, a 401(k) plan:
•
Shows your employees you care. A 401(k) plan is an
investment in your employees’ futures. In fact, many employees
existing employees and provides numerous other strategic
cite retirement options as one of the primary benefits they
advantages for your company.
seek when deciding where to work. Moreover, studies show
A 401(k) plan allows your employees to deposit a portion of their that having happy employees contributes to higher work
paycheck (pre- or post-tax, depending on the contribution type) satisfaction, lower turnover and increased profits.
into a retirement savings account. Oftentimes, employers also
contribute a specific amount or percentage to these accounts as
well. While these plans started as a supplement to pensions, these
days they stand alone as an employee’s primary source of income
during retirement. Keep reading to discover why a growing number
of employers have started offering a 401(k) plan as part of their
benefits package.
•
Helps you build your own nest egg. With proper plan design,
a 401(k) allows owners (and their family members) to defer up
to $19,000 a year in retirement savings. Individuals older than
50 may defer an additional $6,000. When you add company
match contributions or profit sharing contributions on top of these
amounts each year, you can clearly see how a 401(k) plan can
help you build a nice retirement plan balance for the future that is