In part one of this two-part series, a Jacksonville construction attorney from Cotney Construction Law discussed the importance of helping employees pay for retirement through the use of an employer-sponsored retirement savings plan, such as a 401(k) plan. After breaking down the two primary types of 401(k) plans, traditional and Roth, we circled back around to Ted Benna’s thoughts on the importance of these plans. As the “the father of the 401(k),” Ted Benna is uniquely suited to divulge information pertaining to the benefits of these plans.
Now, we will continue to unpack the most important facts about 401(k) plans and detail why helping your employees pay for retirement can actually strengthen your business. Remember, for all of your construction-related legal needs, including maintaining compliance with the laws dealing with these retirement savings plans, consult the Jacksonville construction attorneys from Cotney Construction Law.
Many U.S. Workers Aren’t Saving for Retirement
According to data from the Bureau of Labor Statistics (BLS), thirty-six percent of workers in the private sector are not enrolled in a defined employer-sponsored retirement savings plan. Many of these workers are employed by small businesses. In an interview with CNBC, Ted Benna stated that the main reason small businesses don’t offer retirement savings plan is because they “believe the 401(k) is too complex and expensive.” And, although he is responsible for establishing the original 401(k), he doesn’t necessarily disagree. “There are, in fact, better alternatives available to them. There is limited information. It is not easy for them to find out what is available,” Benna said. So, what are the alternatives?
Alternatives to the Traditional 401(k) Plan
Aside from the Roth 401(k) plan we discussed in part one, there are many other alternatives to this tried-and-true, employer-sponsored, retirement savings plan, including state-run payroll deduction IRA (individual retirement account) programs, payroll deduction IRAs that allow for employer-matching contributions, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. Consult a Jacksonville construction attorney to learn more about which option is right for your business. Keep in mind that your options may differ depending on the state your business is based out of.
Why Helping Employees Pay for Retirement is Important
Helping your employees pay for retirement can be good for your employees and your business. As an employer, you will be granted access to some substantial tax advantages. Furthermore, these plans are viewed as a benefit and may improve your company culture while simultaneously motivating your workers. In the shadow of an ongoing labor shortage, it’s vital that contractors give themselves a recruiting advantage to procure more talent before the pool is exhausted.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.