Choosing the right 401k plan for you and your employees can be a daunting task. Yet, it’s rather manageable if you know what you’re doing. Read
With nearly 70% of all Americans holding less than $1000 in their retirement accounts, it’s essential that you help your employees to save. Choosing the best 401k plans for your employees not only helps you to attract great talent, it helps you to keep it. When you provide a strong retirement plan, you tell your employees that you really care about them and their families.
Here are 4 things you need to look for when you’re searching for the ideal 401k plan for your company.
1. Make It Customizable
When you’re looking for the best 401k plan for your company, you’ll have plenty of options and plenty of institutions who want to offer you 401ks. You’ll need to give your employees different options for contributing and one that gives them control over their financial futures.
Your employees will appreciate being able to customize their retirement accounts on their own.
While you should help them by contributing a matching percentage to their own contributions, you need to leave it in their hands.
2. You Need Direct Deposits
Direct deposits are important for a 401k provider. Every 401k plan should have a way for employees to contribute directly from their paycheck. This takes the element of choice out and allows them to automatically build their wealth.
Direct deposits keep employees from skipping a month here and there, allowing them to maximize the amount of savings they have in their retirement account. Without direct deposits, lots of employees could make short-sighted decisions that jeopardize their ability to retire at a later date.
3. There Should Be an IRA option
An IRA is a great way to build a strong retirement fund that could help you to move to another place and enjoy your ideal retirement experience. An IRA is a more aggressive fund than a 401k which can yield higher results.
While there are 401k and IRA contribution limits, offering the IRA option gives employees a second way to contribute to their retirement. Your employees will learn more about how to build wealth while doing it in real time. Getting your employees on board with an IRA option will be easy, so long as your 401k provider also provides this option.
4. Digital Interface Could Help
Your employees deserve to have control over the money they’ve invested. The institution you work with should recognize this and help by providing a digital interface for managing their accounts.
The digital interface should ideally come in an app form that your employees will be able to use on their phones and tablets. This will make investing easier and more efficient.
The Best 401k Plans Have Flexibility
The one thing that you need from any of the best 401k plans is a flexibility that allows your employees to manage and grow their retirement at their own speed. While some will contribute aggressively and live meagerly until they can retire, others won’t want to do that. So long as every one of those employees will have something saved for them, you’re making the right choice.
If you’re struggling to avoid your next hurdle as a small business owner, check out our guide for tips.