Top 5 Key Features of a 401(k) Plan for Business Owners
29 Aug 2024
Top 5 Key Features of a 401(k) Plan for Business Owners
Attracting and retaining key employees can be challenging for small businesses, and offering a competitive 401(k) plan can make a significant difference. A robust benefits and retirement package often outweighs a simple salary increase. However, selecting the right 401(k) plan is crucial as many options can be expensive and confusing.
To ensure your 401(k) plan is effective, it must be easy to use. A user-friendly interface and seamless integration with your payroll system are essential. High costs are a common issue with 401(k) plans; understanding and managing fees—such as record-keeping, investment, and advice costs—can help lower expenses and grow retirement savings faster.
Offering a variety of investment options is vital. Your plan should include diverse asset classes, such as large and small cap U.S. stocks, international stocks, bonds, and stable value funds. Additionally, it should limit your liability as a business owner by potentially outsourcing fiduciary responsibilities to service providers.
Lastly, the plan should support your business’s unique needs, providing educational resources and aligning with your company’s culture. Carefully choosing a 401(k) plan with these features can enhance its effectiveness, helping you attract and retain top talent while also benefiting your own retirement savings.