Offering Valuable Insight in Your Benefit OptionsA company is only as valuable as the people that it has working for it. In order for your company to retain and/or improve its current level of operational success and efficiency, you need to attract and keep high quality employees. Offering a variety of valued employee benefits such as health and dental insurance coverage is expected in today’s market. If you really want to wow current and prospective employees with your benefits, you need to focus your efforts on providing better investment and retirement savings options.
Explaining Retirement Savings AccountsYou certainly have no shortage of choices to select from when setting up a retirement plan for both you and your workforce. Some of the most popular options include:
- 401(k) plans: A tax-deferred defined contribution plan in which funds are spread out over a variety of investment accounts.
- 403(b) plans: Retirement savings plans similar to 401(k) plans, yet only available through certain organizations, such as non-profits, private ministries, cooperative healthcare organizations, and public education providers.
- IRA: A savings vehicle set up through a financial institution whose growth is exempt until the money is withdrawn. Roth IRAs actually allow contributors to pay tax before contributions are made, saving them from having to pay when they finally access the funds.
- Pension plans: Defined benefit plans where a portion of each paycheck is placed into investment accounts. Unlike a 401(k), the employer guarantees a certain benefit amount from these investments once an employee retires.
- Safe Harbor: Safe Harbor 401(k) plans allow business owners to maximize their contributions to employee retirement accounts while simultaneously reducing some of the limits of IRS non-discrimination testing. Safe Harbor plans also allow businesses to deduct all matching contributions.
Each of these investment tools offers distinct advantages. Yet none is a universal benefits package solution. You must determine which will provide your company with the best potential for significant returns as well as tax savings.