Employer Sponsored Retirement Plans aren't just for big companies
Employers face many challenges when it comes to attracting and retaining qualified employees. Providing a valuable retirement package in the form of defined benefits and/or defined contributions may help an employer to garner the additional skill sets they need and entice employees to their organization.
For many employees, retirement has become known as the "golden decades". Many employees are living well into their 90s. For retirees, there are three “legs” to retirement income sources — social security, personal savings and employer-provided retirement plans. An additional income source beyond personal savings and social security can enable a retiree to maintain a standard of living with some dignity and respect.
As a business owner, your reasons for implementing a qualified retirement plan go far beyond securing federal income tax benefits for the business. Qualified retirement plans can help your business to recruit high-quality employees, retain their services and enhance good employer-employee relationships.
When it comes to attracting and keeping good employees, a firm with a qualified retirement plan is at a distinct competitive advantage to those without these types of plans. More importantly, businesses with qualified retirement plans may deduct plan contributions off their taxes as a necessary and ordinary business expense. So in essence, through this tax deduction, the government is subsidizing your qualified plan benefit expenses.