Highlight the Best Features of 401K to Encourage Participation

I have a 401k plan for the employees of my small boutique. How do I gain enough interest in the plan so that they voluntarily make maximum contributions? – Mackenzie Callister, Phoenix.

Presenting your 401K in a good light is really easy because this retirement plan already comes with an array of attractive benefits for your employees. But, it is a fact that even today, many employees are not aware of exactly how useful this plan can be. Highlighting some of the main advantages that your staff stands to gain if they make contributions to their 401K will definitely encourage them to take voluntary interest in this plan. Here are a few ideas you can use.

In the current economic scenario, your employees are sure to be toeing a cautious line when it comes to investing their money. Many Americans had their entire savings wiped out during the recent recession, especially those who had invested in equity or real estate. Given that the primary objective of saving is to ensure financial independence during your retirement years, a safe avenue like 401k is ideal for retirement planning. Present your 401K plan as the simplest and most financially advantageous plan that your employees will ever use to make their retirement years financially secure.

The fact that they will not be paying taxes on the contributions they make to the 401K just makes this retirement plan even more attractive. Every contribution goes directly from the paycheck into the 401K before tax. This reduces their total taxable income, and consequently, reduces the tax that they need to pay.

Use a software suite like http://smallbusiness401k.com to give your employees the ability to manage and track their 401k easily and you will see more of them voluntarily choosing to make maximum contributions to this retirement savings plan.

About Elliot Earl, Director, Pension Trade Association
Director, Pension Trade Association Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: