Helping your employees save for retirement not only makes it easier to recruit new staff members, but also boosts the financial security of your staff. This can help to make employees feel more motivated and settled at work. A great 401(k) package is the most common–and usually the most efficient–way to do this.
Named after the relevant tax code, a 401(k) is a way for your business’ employees to put part of their salary into a retirement savings plan where it’s invested.
Usually this money isn’t taxed as income now, and instead the tax is paid when they withdraw the money later in life. Plans that work the other way around are known as Roth 401(k).
Businesses can allow employees to put portions of their salary into a 401(k), but to make a plan more attractive, many employers will offer to match the amount with an additional payment. Usually, this money can’t be withdrawn until the employee has been with the company for a certain period of time, so it’s an effective way to retain staff.
If you’re interested in offering your business’ employees a competitive 401(k) package, our employee benefits team can walk you through your options.