Business Insurance 401k Retirement Plans for Small Business Employees
There is no “one size fits all” approach to finding the best 401k retirement plans for small business to fit the needs of you and your employees. Retiring, especially in New Jersey, can be expensive! So you need to make sure you and your employees are building your nest eggs early. Our 401k experts will analyze your business to determine the best type of retirement plan to help you reach your financial goals.
What is a 401k Retirement Plan?
A 401k plan allows you and your employees to save for retirement on a pre-tax basis. Your employee can elect to have you, the employer, contribute a portion of his or her cash wages to the retirement plan. These deferred wages (commonly referred to as elective deferrals) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 since they were not included in the taxable wages on your Form W-2. However, gross income is subject to Social Security, Medicare, and federal unemployment taxes.
Why should you implement a small business retirement plan?
There are many reasons why you, as a business owner, should offer a 401k retirement plan to your employees. Offering retirement plans at your business shows your employees that you care about their future. That kind of loyalty will help you attract and keep talented personnel. In addition, employers are entitled to a tax deduction for their contributions to employee’s accounts. Here are some other ways a 401k retirement plan can help you and your employees:
– Pre-tax contributions may grow through investments in stocks, mutual funds, money market funds, savings accounts, and other types of investments.
– Employees can decide how much to contribute to their accounts on a before-tax basis.
– Matching a portion of your employees’ contributions will help them achieve their financial goals.
– Contributions and earnings generally are not taxed by the Federal government or by most State governments until they are distributed.
– Allow participants to take their benefits with them when they leave the company, easing administrative burdens.
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