SMBs retirement

One of the most pressing employment issues today is offering retirement benefit options for SMBs that are attractive enough to foster a culture of loyalty. Although SMBs are the backbone of the employment in America, it can be difficult to maintain a high level of benefits that provide enough incentive to keep their employees happy.

As the demands of planning for the future become greater in an environment where entrepreneurship is becoming more lucrative, employers must find ways to keep their employees confident and satisfied with the growth and development of their personal and professional goals.

Having a good retirement plan in place is one of the key factors in maintaining employee loyalty. Employees desire retirement benefit options for SMBs that allow them to effectively plan for retirement within the work environment, with the flexibility to have additional investments and benefits elsewhere. In today’s changing economic climate, relying on social security is not a smart choice, as those credits may be reduced or become obsolete.

As the future of social security continues to be uncertain, retirement benefit options for SMBs becomes one of the top concerns in the work environment. With so many questions surrounding this issue, SMBs cannot avoid offering retirement plans for employees, as the costs of recruitment and training becomes one of their biggest expenses.

How can SMBs help employees plan for retirement?

There are a number of ways to develop retirement benefit options for SMBs. Depending on the size of your organization, there are a number of solutions available:

  • 401 (k) plan

A 401(k) is a retirement savings plan that defers income taxes on the funds until they are withdrawn. This is the most popular and well-known option among employees and organizations.

  • Profit sharing plan

A profit sharing plan allows employees to make pre-tax contributions where the funds will not be taxed until withdrawal, but in a profit sharing plan, the employer decides how much they will contribute each year.

  • Savings Incentive Plan (Simple IRA)

This plan is similar to that of a 401(k), but is funded by tax-deductible employer contributions and pre-tax employee contributions.

  • Simplified Employee Pension Plan (SEP IRA)

Contributions are only made by the employer, but can be beneficial to the employee when integrated with other investments.

How can SMBs properly manage their retirement plans?

Using a PEO can lower the administrative costs associated with offering and maintaining these retirement plans, while making it easy for the employer and employee by integrating the deductions into the current payroll system. Additional advantages of having a PEO handle the administration:

  • Education

Employees feel better about their retirement decisions when they have the right education to make informed decisions. A PEO is equipped to provide each employee with the information they seek through a variety of options, including online tools and publications. They offer group and one-on-one investment advice for all employees, on or off-site to meet their needs.

  • Statements

A PEO will provide statements to employees and the employer for record-keeping and auditing purposes, and will help the employee determine whether or not they need to restructure their investments for better gains.

  • 5500 Tax Filings

The PEO will provide annual 5500 reports as a courtesy to the company, as they are the fiduciary of the 401(k) plans.

Most PEOs are able to offer 401(k) Safe-Harbor plans that will encourage employees to participate in the program because employer contributions are 100% vested.

Establishing retirement benefit options for SMBs that will allow employees to maximize their contributions is key in providing an incentive for them to remain with your organization. Knowing the options available to you and working in conjunction with employees to determine which types of retirement benefits would be best is key.

A PEO will assist in getting this information to help plan a retirement benefit package for your employees that will work for you. As an employer, it is important to seek those benefits that will foster a feeling of stability for your employees. Working with a PEO to establish and solidify retirement benefits is a step in the right direction toward your company’s future.

If you’d like to find out more about how PEOs can help you provide great benefits and payroll management at less than you are paying now, contact us today for a free consultation.

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