401(k) basics
What's a 401(k)?
A 401(k) is a savings account that allows you to save for retirement, tax-deferred without thinking too much about it.
You and your employees designate how much you want to save, per paycheck and it's taken out automatically — pre-tax.
Why 401(k)?
In a recent survey, employees ranked retirement plans as one of the most popular benefits, second only to healthcare. Yet 80% of small businesses don't currently have a plan.
What's holding them back?
Many companies have misperceptions about 401(k) plans — let's debunk them to start.
| Misperception | 401(k) plans are too expensive for a small business like me |
| Actually |
Most 401(k) plans ARE built for bigger companies, with resulting bigger price tags. However, with technological advances, more providers are offering efficient, online 401(k) plans that can help a small cut costs and meet employees' needs. Depending on the provider, the cost of a 401(k) plan can be as little as $100 a month! |
| Misperception | We can't afford or don't want to provide an employer match |
| Actually |
With a 401(k) plan, you don't HAVE to match, but you CAN add one at any time you want. |
| Misperception | It's too complicated |
| Actually |
Setting up and maintaining a 401(k) doesn't have to be complicated. In fact, getting a new plan up and running should only require a few hours of your time. Make sure the 401(k) provider you select makes it easy for you to manage your plan with user-friendly tools, reports and instructions. |
