If you are an employee, the first thing you will look for in a job is its benefits. Would the salary you earn be able to make ends meet? Besides the salary, what other benefits will you get?
Employers around the world must provide certain benefits for their workers. The most common are health benefits and 401k plans.
What is the 401k Plan?
The 401k is a type of retirement savings plan which is sponsored by the employers. Workers can save a portion of their savings pre-taxes.
This savings plan was named after the tax code section that governs it. It was passed in the 1980s as an alternative to pensions. Before the 401k plans, pension funds provided workers with a steady income after they retire.
Like its successor, pension funds were also managed and sponsored by the employers.
However, getting a pension fund nowadays is getting more expensive. Employers found another solution in the face of 401k plans. You can still get pensions today. But more businesses are choosing 401k providers to help manage retirement savings plans.
Can Small Businesses Get 401k Plans?
Both small business and people who are self-employed can get 401k plans. Here are the following types of plans you can get:
- Traditional 401k plans
- Safe Harbor 401k plans
- SIMPLE 401k plans
- Solo 401k plans
- Roth 401k plans
The last type is the traditional one. However, the funds are taken post-taxes. Self-employed individuals can get the Solo or Individual types for themselves and their spouses.
As an employer, you have to know that your responsibility lies in the type of plan you get.
What is the Best 401k Service Providers
The best 401k providers for small business can make it easier to set up this type of retirement plan. The establishment fee ranges from $1500 to $3000. But it can also change depending on your business.
You can find a bank or an insurance provider to establish your company’s plan. But smaller businesses choose a 401k service provider. The provider will need to evaluate your business. After their analysis, they will design and create a plan specifically for you. You can compare roth 401k to roth IRA which makes easy to understand.
The best 401k service provider for small business people should have a license. Ensure they’re CEFEX, i.e., a certified fiduciary advisor. Asking recommendations and conducting research will help you find the best 401k service providers for small businesses in your area.
Additionally, the company should be reliable. Check reviews of their past clients, and if you can, ask your network for a referral. Contact the companies on your list and have a one-on-one consultation. Don’t be afraid to ask them every question you have until you are satisfied with the plan.
The success of your company does not just rely on how well you do marketing and sales. It is also about taking care of your employees. The happier they are, the more loyal they will be and perform better. Providing them with a chance to have a better retirement will inspire them to work harder.