Many small business owners might still believe that offering a 401(k) plan is overly complex or too costly. However, this notion needs updating. With the recent changes under the SECURE 2.0 Act, retirement plans have become more accessible and beneficial for both employers and employees.

Running a business is challenging enough without adding the complexities of managing employee benefits. Yet, fewer than one in four small businesses currently offer a 401(k). This number is, however, on the rise thanks to legislative changes and market innovations making these plans more achievable.

Why Consider a 401(k) Now?

• Businesses with up to 100 employees might qualify for up to $5,000 per year in tax credits for plan startup costs for the first three years.
• There is an additional credit available of up to $1,000 per employee for employer contributions.
• Auto-enrollment has become standard for many new plans, significantly boosting employee participation.
• Well-designed 401(k) plans help in attracting and retaining top talent while reducing taxable income. Plan expenses and employer contributions are tax-deductible.
• There are now more options that are flexible and affordable, making it an ideal time to consider offering a retirement plan.

The perception that 401(k) plans are a significant administrative or financial burden is being overturned. Offering these plans is more manageable than ever, and small businesses stand to benefit significantly. We urge you to explore your options and speak with a financial or benefits advisor to create a plan tailored to your business needs.