The Benefits of an Employee Retirement Plan

The Best Route to Retirement Security = The Right Retirement Plan

The right retirement plan provides multiple benefits for you, your business and your employees. Contributing to a retirement plan makes sense for practically all taxpayers, as it is one of the easiest and most powerful ways to reduce your overall tax burden.

Business Benefits

• Employer contributions to the Plan are tax-deductible.  This allows the employer to deduct the entire employer contribution from their business’s taxable income, potentially lowering their taxable income and tax liability as well.

• Plan designs can permit flexibility in employer contributions, so that good years can allow for a greater contribution and vice versa.

• Tax credits and other incentives for starting a plan may reduce its costs.  Generally, the credit equals 50% of the cost to set up, administer the plan and educate employees, up to a maximum of $500 per year for each of the first three years of the plan.

• Flexible Plan designs are available.  A retirement plan can attract and retain better employees, reducing new employee training costs.

• The right Retirement Plan is a powerful tool for recruiting, retaining and rewarding your employees since they love 401(k) Plans.

Employee Benefits

• Employee contributions can reduce current taxable income and lower the tax liability.

• Contributions are easy to make through payroll deductions.
  
  
• Assets in the plan grow tax-free.  Taxes on investment income are deferred until Participants begin taking withdrawals.
  
  
• Compounding interest over time allows small regular contributions to grow to significant retirement savings.
  
  

• Retirement assets can be carried from one employer to another.

• Employees may be eligible for an IRS tax credit under the Saver’s Credit program.
  
  
• Employees have an opportunity to improve financial security in retirement, so that with proper planning, the employee can actually retire.

Radu Dragan
Markley Actuarial