If you think about your business as your retirement plan, you aren’t alone. But banking on that – transferring to family/friends for future compensation or selling for cash – can be uncertain.
A retirement plan at your business can help with that uncertainty. It can help you diversify your assets beyond your business. And it gives you a tax-savvy way to save for your own retirement.
Your business gets a tax deduction for contributions you make as employer contributions to a retirement plan. And assets in the plan have the potential to grow in a tax-deferred manner. You can save on expenses, too. Eligible employers with a new plan can apply the start-up tax credit, based on 50% of the plan costs, for the first 3 years beginning in 2020: greater of $500 or the lesser of $250 x NHCEs eligible or $5000. Though, best to consult with your tax consultant for specifics.
An employer-sponsored retirement plan is an important part of a compensation package – it can impact when and how someone can retire – and where they work.
They might be hungry for one. And it might help you recruit and retain top talent. It shows that you are a stable company, and that you want to invest in and keep your employees.
You need to run your business. Sponsoring a retirement plan does not have to cut into your valuable time. I can help you handle the plan, and I know about other service solutions that may save you time by outsourcing human resource administrative duties and payroll in connection with your retirement plan.
Generally, the goal of a retirement plan is to help employees get retirement ready. Do you know if your plan is helping employees achieve that goal? I can help you assess your current retirement plan to determine:
It’s important to document guidelines for managing and allocating fees and expenses and to consider whether the fees and expenses are reasonable. It can feel a bit daunting, but I can help.
Many plan sponsors would like to spend most of their time running their business – not on administrative duties related to the plan. I can help with your retirement plan needs, such as:
A plan could offer a mixture of:
It is a prudent fiduciary action to monitor the investment options the plan offers. The monitoring process should formalize a procedure to review and monitor performance of the investment options and align with the goals of the plan’s investment policy statement (IPS). I can help by performing an investment review periodically to help ensure plan objectives are being met.2