What Retirement Plan Fits My Business?

As an employer, you have the power to significantly impact your employees’ financial futures by offering well-structured retirement plans. Each type of plan comes with its own set of features, benefits, and considerations. Let’s explore the most popular options:

SEP IRA: Flexibility for Small Businesses

• Simplified Employee Pension (SEP) IRAs allow for easy setup and management
• Contributions are a percentage of employee pay, typically up to 25%
• No annual contribution requirement, offering flexibility during economic fluctuations
• Uniform contribution percentages for all eligible employees

SIMPLE IRA: Streamlined Solution for Smaller Teams

• Ideal for businesses with 100 or fewer employees
• Offers options for employer matching or fixed contributions
• Minimal paperwork and administrative burden
• Perfect for startups and small enterprises seeking simplicity

Profit Sharing: Aligning Company Success with Employee Benefits

• Flexible plans that can be tailored to company-specific goals
• Contributions tied to company profitability, fostering a sense of ownership
• Can be used to incentivize and reward employee performance

401(k) Plan: The Gold Standard of Retirement Savings

• Tax-advantaged contributions with potential employer matching
• Traditional and Roth options available, catering to diverse tax strategies
• Higher contribution limits compared to IRAs
• Highly valued by employees and a powerful recruitment tool

Defined Benefit Plan: Predictable Retirement Income

• Provides a specified benefit amount at retirement
• Typically based on salary history and years of service
• Offers employees confidence with predictable retirement income
• Can be an attractive option for retaining long-term employees

By offering a well-chosen retirement plan, you’re not just fulfilling a legal obligation – you’re investing in your employees’ future financial independence. This commitment can lead to increased job satisfaction, improved retention rates, and a more motivated workforce. Take pride in knowing that your retirement strategy can play a crucial role in helping your team pursue their long-term financial goals.

Remember, choosing a retirement plan for your business depends on various factors, including company size, budget, and employee demographics. Consider consulting with one of our iWealth Financial Advisors to determine the most suitable option for your unique situation.