How to Pick a Workplace Retirement Plan for Your Employees

December 3, 2021

A strong retirement benefit plan can help you recruit employees and reduce turnover. Every employee wants to work for their future. A strong plan helps them feel comfortable with their current career and sets them up comfortably for the future. The various types of workplace retirement plans you can offer employees include SEP-IRA, 401(k), and PSPs. 

SEP-IRA 

A SEP-IRA is a retirement account that offers tax breaks for business owners and self-employed individuals who put money away for the future. Like a traditional IRA, SEP-IRA are contributions to a retirement account that are tax-deductible. When taken out at retirement, the distributions are taxed as income. SEP-IRAs are best for self-employed or small-business owners. With this type of retirement, you must match the compensation you give yourself to the contribution you make to your employee’s plan. Equal contributions as a percentage of compensation is why SEP-IRA is best for small-businesses with few employees. 

401(k) 

A 401(k) plan is the most common type of employer-sponsored retirement savings program. A 401(k) is a voluntary retirement savings plan where employees can contribute a portion of their pre-tax earnings. Many companies match 401(k) contributions on a tax-deductible basis. While employers administer and control the plan, employees can borrow against the value of their 401(k) plan. According to Franchise Gator, some 401(k) plans let employees roll over the money to start a business. An employee’s plan can also rollover when switching from one company to another. 

PSPs 

A PSP stands for Profit-Sharing Plans. A PSP is a retirement plan funded by discretionary employer contributions. As Sofi points out, an employee receives a percentage of a company’s profits based on its earnings. The employer can make contributions on a voluntary basis. This gives employees an opportunity to share in the profits of a company. This plan defers income taxes and asses them on distribution from the account in retirement. This retirement plan is totally controlled by the employer and leaves the employee at the mercy of their employers’ profits. Because of this it is less common and more beneficial for the employer than the employee. 

Offering a retirement plan is a capital and time-intensive way of rewarding your employees. You want to choose what you can afford as an employer and what your employees need. Without offering a quality retirement plan, you risk losing great workers to competing businesses. Analyze the various plans available to determine what is right for your company. 

Read this next: Factors That Matter When Shaping Your Company Culture

Categories

More Posts:

What are local links and how to earn them

What local links are and how they might assist local businesses develop an efficient SEO strategy are covered in this article. Local links allow visitors to learn more about a region and its businesses by connecting websites from the same area that are relevant to one another. They must be pertinent to the neighbourhood and offer valuable resources or information. Content marketing, reviews, sponsored content, social media, and directories are all ways to generate local links.

5 Unexpected Industries That Need Social Media Marketing

In today’s digital age, social media has become an essential tool for businesses to connect with their target audience and promote their products or services. While it’s common to see industries like retail, hospitality, and entertainment using social media for marketing, there are several unexpected industries that can also benefit from social media marketing.

The Role of Emotional Intelligence in Effective Leadership

Emotional intelligence is crucial for effective leadership. It involves recognizing, understanding and managing emotions in oneself and others. The five components of emotional intelligence are self-awareness, self-regulation, motivation, empathy, and social skills. Leaders can improve their emotional intelligence by listening, connecting with employees, unlocking motivations, and seeking to understand others and themselves.

Why Companies No Longer Give Workers a Pension

Pensions would seem to be a thing of the past. You may hear an older person talk about getting their pension, but it’s not anything almost anyone these days can access. They used to be fairly commonplace, however, so what changed? Why do companies not offer their...

Signs it’s Time to Find a New Office Space

For any business owner, their office space is an essential aspect of success. It's the place where you and your team devote countless hours a day working alongside clients or partners. In some cases, it may be time to relocate to a different workspace. Here are...

10 Ways AI is Transforming the Way We Care for Our Skin

From analyzing skin conditions to recommending personalized skincare routines, AI is revolutionizing the beauty industry. With the help of machine learning algorithms, beauty brands are now able to offer tailored solutions that address specific concerns, such as acne, wrinkles, and hyperpigmentation. Thanks to AI-powered tools like facial recognition and augmented reality, we can even visualize how different products will look on our skin before making a purchase.

The Social Entrepreneur – changing the world through business

The Social Entrepreneur, changing the world through business.
Individuals who start their own business are motivated by different things. Some people dream of becoming wealthy and building a global company. Others want to pursue something they’re passionate about or yearn for the freedom of being their own boss. In recent years, a new kind of entrepreneur has emerged: the social entrepreneur.
A social entrepreneur is a person who creates a business that has a positive impact on their community, society, or the world. Typically, social entrepreneurs are driven by a deep desire to create positive change.

5 Tips for Recruiting Younger Real Estate Agent Candidates

To ensure your agency’s survival, you may need to renew your focus on recruiting professionals that belong to the millennial and Gen Z demographic. To guide you in this task, here are a few helpful tips you may want to follow:

Ideas for Setting Up a Non-Profit Organization

Have you always had the desire to make a bigger impact on others, particularly on underrepresented and underserved communities? One great way to do this is to set up a successful non-profit organization.  Here are a few ideas for setting up a non-profit organization. ...

Why Your Business Should Offer HSA-Compatible Health Plans

As a business owner, you have a lot of responsibilities when it comes to taking care of your employees. If you offer good benefits, such as healthcare, you’ll be more likely to hire and maintain the best employees.  Here are a few reasons why your business should...
What are local links and how to earn them

What are local links and how to earn them

What local links are and how they might assist local businesses develop an efficient SEO strategy are covered in this article. Local links allow visitors to learn more about a region and its businesses by connecting websites from the same area that are relevant to one another. They must be pertinent to the neighbourhood and offer valuable resources or information. Content marketing, reviews, sponsored content, social media, and directories are all ways to generate local links.

5 Unexpected Industries That Need Social Media Marketing

5 Unexpected Industries That Need Social Media Marketing

In today’s digital age, social media has become an essential tool for businesses to connect with their target audience and promote their products or services. While it’s common to see industries like retail, hospitality, and entertainment using social media for marketing, there are several unexpected industries that can also benefit from social media marketing.

The Role of Emotional Intelligence in Effective Leadership

The Role of Emotional Intelligence in Effective Leadership

Emotional intelligence is crucial for effective leadership. It involves recognizing, understanding and managing emotions in oneself and others. The five components of emotional intelligence are self-awareness, self-regulation, motivation, empathy, and social skills. Leaders can improve their emotional intelligence by listening, connecting with employees, unlocking motivations, and seeking to understand others and themselves.

10 Ways AI is Transforming the Way We Care for Our Skin

10 Ways AI is Transforming the Way We Care for Our Skin

From analyzing skin conditions to recommending personalized skincare routines, AI is revolutionizing the beauty industry. With the help of machine learning algorithms, beauty brands are now able to offer tailored solutions that address specific concerns, such as acne, wrinkles, and hyperpigmentation. Thanks to AI-powered tools like facial recognition and augmented reality, we can even visualize how different products will look on our skin before making a purchase.

The Social Entrepreneur – changing the world through business

The Social Entrepreneur – changing the world through business

The Social Entrepreneur, changing the world through business.
Individuals who start their own business are motivated by different things. Some people dream of becoming wealthy and building a global company. Others want to pursue something they’re passionate about or yearn for the freedom of being their own boss. In recent years, a new kind of entrepreneur has emerged: the social entrepreneur.
A social entrepreneur is a person who creates a business that has a positive impact on their community, society, or the world. Typically, social entrepreneurs are driven by a deep desire to create positive change.

Ideas for Setting Up a Non-Profit Organization

Ideas for Setting Up a Non-Profit Organization

Have you always had the desire to make a bigger impact on others, particularly on underrepresented and underserved communities? One great way to do this is to set up a successful non-profit organization.  Here are a few ideas for setting up a non-profit organization. ...

All Categories

Business Operations

Entrepreneur Interviews

Marketing, Networking, & Social Media

Self Care & Personal Development

Working Moms

Business Software and Technology

Entrepreneurship & Small Business

Organizing Tips

Sales

Career Building

Family Businesses

Inspiration

Starting Your Own Business

Work-Life Balance

Communication

Hiring Help

Management & Leadership

Time Management & Priorities

Women in Leadership

Recent Posts

Elements That Should Be Part of Your Company Retreat

Elements That Should Be Part of Your Company Retreat

A company retreat is an excellent opportunity for team-building, learning new skills, and fostering relationships between colleagues. Whether your team is large or small, a well-planned retreat can be an invaluable investment in your company's success. We will explore...

How to Make Employee Health a Priority

How to Make Employee Health a Priority

Prioritizing employee health is crucial for creating a healthy and productive work environment. By investing in the health and wellbeing of your employees, you can improve morale, reduce absenteeism, and build a positive company culture. Here are some tips on how to...

Why You Should Run Your Business on the Latest Technology

Why You Should Run Your Business on the Latest Technology

In today's fast-paced business environment, keeping up with technological advancements is essential for success. Implementing the latest technology can offer numerous benefits, such as improved productivity, enhanced data security, and reduced costs.  Improve...

What are local links and how to earn them

What are local links and how to earn them

What local links are and how they might assist local businesses develop an efficient SEO strategy are covered in this article. Local links allow visitors to learn more about a region and its businesses by connecting websites from the same area that are relevant to one another. They must be pertinent to the neighbourhood and offer valuable resources or information. Content marketing, reviews, sponsored content, social media, and directories are all ways to generate local links.

Ways for Increasing Property Management Lead Generation

Ways for Increasing Property Management Lead Generation

Property management is not a simple job, there are multiple tasks that a property manager should complete for various property investors. Marketing is one of the difficult parts, but it’s crucial. You can only attract tenants to your property and gain income after you have generated leads. Therefore, you should try your best to come up with smart and effective strategies to get your company known.