As the owner of a small business, you are responsible for selecting and setting up a retirement savings plan for yourself and your employees.
With the many options available from our bank, we can help you pick a plan that meets the needs of your business while catering to your staff. Assistance in these matters can be offered as part of your business banking options, but it is helpful to have some understanding of your choices when speaking with professionals. Here are a few plans you can choose from and the advantages each offers for your employees:
- Individual retirement plans: These accounts are not sponsored by your business, and your employees are responsible for setting them up. However, you can allow your staff to make contributions via deductions from their pay. These contributions are tax deductible for the employees and allow them to choose how often they want to save.
- 401(k) plans: These retirement savings accounts have become common in the small business sector. With these plans, which your business sponsors, a portion of your employees' paychecks will be deferred and deposited into their individual accounts. These deferrals can be made before or after the contributions are taxed. The latter choice is called the Roth option. Many employers choose to match a portion of their employees' savings.
- Simplified Employee Pension plans: With this option, you can create SEP IRAs for yourself and your employees. Unlike a 401(k), where your staff can determine the amount of their contributions, your business makes all contributions to the plan. A uniform percentage has to be given for each employee annually, but you're not required to make contributions every year, which can be beneficial if your business is facing hardships. Compared to other plans, SEPs have lower costs and fewer operational demands.
- Savings Incentive Match Plan for Employees: A SIMPLE plan is great if you have fewer than 100 employees. It requires that your staff contributes a percentage from each paycheck and that you make contributions to their plans as well. These contributions are made to traditional IRA plans for your employees. Your contributions are tax-deductible and employee contributions can be tax-deferred. These plans also have lower administrative costs and fewer demands.
For more information about business banking solutions, contact Landmark Bank.
Investment products and services are not FDIC insured, not insured by any federal government agency, not a deposit or bank obligation, not financial institution guaranteed, subject to investment risk, including potential principal loss.
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