| Low Cost: No
employer contributions are necessary, The plan can be entirely funded with contributions
from your employee’s salaries.
Increased Company Loyalty:
401k's are popular. Offering one may help you attract and retain good employees.
Higher Productivity:
A retirement plan can improve morale, leading to higher productivity.
Optional Employer Contributions:
You may also contribute to the plan, either through matching or profit
sharing contributions.
Tax Savings:
Optional employer matching contributions or profit-sharing contributions reduce the
company’s tax liability.
Lower Turnover:
A vesting schedule for employer contributions can reduce expensive
turnover.
Flexible Plan Design:
It can be designed to meet the precise needs of your company. You may offer such
provisions as plan loans, or allow employees to
select their own investments. |
Convenient Payroll Investment Plan: 401k allow employees to build a retirement “nest egg”
with affordable payroll deductions.
Tax Savings and Tax-Deferred Accumulation:
Employees taxable salary is reduced by the amount of their contribution. Earnings
from their contributions grow tax deferred.
Investment Selection:
The employer selects a menu of options covering a wide range of investment objectives.
The participants then use this menu to select the investments that best fit
their needs.
100% Vesting of Employee
Contributions:
Employee contributions are always 100% vested. Should participants
leave the company before retirement, they
can take their contributions, rolling them into an IRA or other
retirement account.
IRA Alternative:
IRAs have lost much of their appeal since contributions are not always fully deductible. In a 401k, employees regain this key advantage
with pre-tax contributions.
Loan Privileges:
You may add a loan provision allowing employees to borrow from their individual
accounts; giving them temporary access to their retirement funds for important purchases
or emergencies.
Hardship Withdrawal:
You may also include hardship withdrawal provisions for employees who experience
certain financial catastrophes. |
