401k Offers Small Businesses an Edge over Bigger Concerns

Will offering a 401k plan for employees help me attract good talent when there are many bigger companies in my locality carrying out the same business as me? Wouldn’t potential employees simply save in other ways and choose a bigger employer instead of me?- Gerardo H. Fields, Honolulu, HI 96813, recently opened a graphics business from home.

Big companies are usually at an advantage when it comes to hiring skilled talent. They maybe able to offer a bigger paycheck, better perks, even a better brand name. But this does not mean that small businesses are stuck with hiring only those who have not been successful with bigger employers. In fact, today, with special 401k plans designed for small businesses, employers like you are in a good position to compete with larger companies when it comes to hiring the best talent in the market.

Now, it is possible for a business of any size to have a 401k plan that is quite affordable. By choosing DIY suites like the one offered by http://401keasy.com/, you can have a comprehensive plan that gives your employee a good range of investment options. The best part is that these suites make it easy for you as well as your employee to track and manage the funds in the account with ease.

If your business employs less than 100 people, then you may be eligible for the $500 tax credit for first three years since the establishment of the plan. This is an advantage that neither big businesses nor owner only businesses enjoy. For your employee, the fact that contributions go from his pre- tax dollars cuts down his yearly tax bill quite significantly, letting him save more and give less to uncle Sam.

During the recession, many big companies were forced to cancel the employer matching contributions as part of cost cutting measures, thus demotivating employees quite dramatically. In a small business like yours with limited employees it is a relatively easier task to sustain employee match contributions because the total outlay is not as massive as with bigger concerns that have many more 401k participants on the rolls. By maintaining contributions and making it easy for your employees to save for their retirement with a DIY suite, you can present yourself as an empathetic employer who is actually helping them save for their future financial security.

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.

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