Implementing a simplified employee pension plan is a way for small businesses to offer employees a way to save for the future. Many small business owners also appreciate being able to save for their retirement. While there are many benefits, a top reason why this is often a preferred solution is that it’s a lot simpler than other plans. Managing a traditional IRA isn’t possible for many small businesses. As a result, there is often a search for another option.
The idea of implementing an IRA can generate thoughts of extensive documentation that isn’t easy to understand. A simplified employee pension plan is just the opposite. There is a limited amount of paperwork required for both the employer and the employee. This kind of plan is simplified for the benefit of all parties. Even when employers make contributions, the process is much easier than you might imagine.
There are potential tax benefits associated with a simplified employee pension plan. A tax credit was expanded to encourage the implementation of retirement accounts by small businesses. The perceived expense of implementing a pension plan is not always the actual expense. Consider working with a tax professional to understand how it will impact your business.
Setting up a pension plan for employees isn’t just about the future, it also affects the present. You are more likely to retain top talent when there is some kind of retirement plan in place. Employees are less likely to remain loyal when there isn’t a retirement plan.