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401K Retirement Plans There are many advantages to offer your employees a savings for retirement through your workplace retirement savings plan, including professional management of their investments. The best reason to save in your plan is plain and simple: it's up to you to save and invest for your own future.
Here are a few more reasons to help. 1. Increase your employee's take home pay ... really
Investing money through a 401(k) plan gives your employee a benefit of tax-deferred saving. This will increase their take home pay and decrease their current taxable income. Their pre-tax contributions are not tax-free but they're tax-deferred. This means they don't pay income tax on this money until it is withdrawn, which should be at retirement, when you may be in a lower tax bracket.
2. Automatic payroll deduction makes it easy to save
Saving is easier with a 401(k) because the money is automatically deducted from your employee's pay before they get their paycheck. This automatic payroll deduction helps make saving their number one priority and they are not tempted to spend it!
3. Most of the plan's investment choices are managed by professionals
Most of the investment options in a 401(k) plan are mutual funds. By investing in mutual funds, the money is managed by highly trained and experienced investment professionals. A portfolio manager with a team of dedicated analysts works to provide in-depth research and analysis on thousands of companies, securities, and other investment opportunities. They do the work, so you don't have to.
4. Most plans allow access to contributions in an emergency
The contributions your employees invest in a 401(k) plan are designed to be withdrawn at retirement, when needed the most. But for those unexpected circumstances, many plans allow employees to withdraw their account balances before retirement.
To learn more about the benenefits of a 401(k) Plan and to see if this plan is right for your business, please contact us.
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