Business Retirement Plans

How to Start a Retirement Plan for Your Business

Establishing a retirement plan is a strategic move that benefits both your business and your employees. It enhances employee satisfaction, aids in talent retention, and offers tax advantages. At Drexel & Co. Financial Planning, we specialize in guiding businesses through the process of setting up and managing effective retirement plans tailored to your unique needs.

Benefits of Offering a Retirement Plan

  • Attract and Retain Talent: A robust retirement plan makes your business more appealing to potential hires and encourages current employees to stay long-term.

  • Tax Advantages: Both employer and employee contributions are tax-deductible, reducing taxable income. Additionally, the IRS offers a tax credit of up to $500 per year for the first three years to help offset setup and administrative costs.

  • Employee Financial Security: Helping your employees save for retirement contributes to their financial well-being, leading to increased productivity and job satisfaction.

Steps to Establish a Retirement Plan

  1. Assess Your Business Needs: Determine your objectives, budget, and the type of plan that aligns with your business structure and employee demographics.

  2. Choose the Appropriate Plan: Several retirement plan options are available, each with distinct features:

    • Simplified Employee Pension (SEP) IRA: Ideal for self-employed individuals or small businesses, allowing employer-only contributions.

    • Savings Incentive Match Plan for Employees (SIMPLE) IRA: Suitable for businesses with 100 or fewer employees, enabling both employer and employee contributions.

    • 401(k) Plan: Offers higher contribution limits and flexibility, with options for employer matching. Setting up a 401(k) plan typically takes 30 to 45 days.

    • Defined Benefit Plan: Provides a fixed, pre-established benefit for employees at retirement, beneficial for businesses seeking to offer substantial retirement benefits.

  3. Select a Plan Administrator: Choose a reliable provider to manage the plan’s administrative tasks, ensuring compliance with regulatory requirements.

  4. Draft Plan Documents: Develop a comprehensive plan document outlining the plan’s terms, conditions, and operational guidelines.

  5. Communicate with Employees: Inform your employees about the new retirement plan, explaining its benefits, enrollment procedures, and contribution options.

  6. Maintain and Monitor the Plan: Regularly review the plan’s performance, ensure compliance with legal standards, and make adjustments as necessary to meet the evolving needs of your business and employees.

Why Choose Drexel & Co. Financial Planning?

At Drexel & Co., we are committed to providing honest, trusted, and knowledgeable financial advice. Our comprehensive services include:

  • Customized Plan Design: We tailor retirement plans to fit your specific business objectives and workforce demographics.

  • Regulatory Compliance: Our team ensures that your retirement plan adheres to all relevant laws and regulations, minimizing legal risks.

  • Ongoing Support: We offer continuous assistance in plan management, employee education, and performance monitoring to ensure the plan’s success.

Get Started Today

Implementing a retirement plan is a significant step toward securing the future for both your business and your employees. Contact Drexel & Co. Financial Planning for a free consultation to discuss the best retirement plan options for your business.

Citations

"Retirement at sixty-five is ridiculous. When I was sixty-five, I still had pimples."
– George Burns

-Aristotle

Having an honest, trusted, and knowledgeable advisor who can help you make smart decisions and create a path to your financial goals is the best way to secure your future and the future of those you care about.