Batman vs. Superman. Hulk vs. Wolverine. Frankenstein vs. Dracula. These are legendary contests, and while we don’t claim that 401GO vs. Colorado SecureSavings is as entertaining as the others, we assert that the results are much more relevant. Our contest is more like a presidential debate than a boxing match, and we’re letting you decide who the winner is.
The Premise
Here at 401GO, we want as many people as possible saving for their retirement. That’s why we started our company — to help small businesses offer retirement plans to their employees. So you might think we would be in favor of Colorado SecureSavings, and in a way, we are. Colorado SecureSavings is much better than nothing. It’s just not as good as 401GO.
What Is Colorado SecureSavings?
Created by the state government, Colorado SecureSavings aims to address the 40% of workers in the state who don’t have access to a retirement plan — almost a million people. Under the state law, employers are required to offer this plan to their employees, unless they have another retirement plan in place already.
As a small-business owner, you may wonder what the Colorado plan offers that workers cannot get by simply opening their own IRA, and the answer is: not much. The hook is that when employees sign up, the money comes directly out of their paycheck, before they get a chance to spend it. This kind of savings is marginally better than paying too much in taxes in order to get a big “refund” in the spring, but you can do better for your employees.
What Is 401GO?
With 401GO, you get many more options as an employer — and more control.
One of the greatest barriers — whether real or perceived — to small-business owners sponsoring a retirement plan for employees is the time and money it takes to get the plan up and running. Some small-business owners simply can’t afford it, while others just don’t want the bother. With 401GO, you can get a 401(k) or IRA program up and running in minutes — not days, weeks or even months. And the cost is minimal.
We concede that this minimal cost (usually $79 per month plus $9 per participant) is greater than the cost of Colorado SecureSavings (zero!), but we believe that you get what you pay for. Free plans are typically worth what you pay for them.
How Is 401GO Better?
One great benefit of working with 401GO is that you get to choose your investment options. You may not be immediately excited by this if you are not familiar with investment options and making choices about them. However, you don’t have to do it alone. We offer guidance via our portfolio builder, but you are also completely free to use your accountant or financial advisor, or make the choices on your own.
You are likely aware that investors should make different choices depending on factors such as their age and risk tolerance, and if this is not an option, employees will not be well-served by your plan. Additionally, without options or proper knowledge, investors may find themselves in a default investment that doesn’t perform well. This can have a tremendous impact on the size of an employee’s nest egg.
Many financial sites devote time to demonstrating how money can grow exponentially over the years, and how impactful it is to start young. Imagine that two workers — one who works at a small business that uses Colorado SecureSavings and another who uses 401GO — invest the same amount of money, but one comes out much richer in the end. Choices matter.
Other Important Differences
With Colorado SecureSavings, employers cannot make contributions to their employees’ retirement accounts. You may believe you are not in a financial position to make contributions yet either, but you may be able to one day. And with Colorado SecureSavings, that is not an option.
One of the biggest draws for employees looking for work is benefits, and specifically a 401(k) with a match. The establishment of a 401(k) program demonstrates the stability of the company as well as the employer’s dedication to workers’ well-being. It puts you ahead of the pack of companies trying to attract the best talent.
And because 401GO offers payroll integration, it’s easy for your company to make the necessary deductions and payments every pay period. Not so with Colorado SecureSavings — deductions must be made manually every pay period. They say the program is free, but they don’t count the hours of labor you must dedicate to facilitation.
The Verdict
We will leave the final tallying up to you, but we have full confidence that shrewd small-business owners in Colorado will see the benefits of working with 401GO. To learn more about 401GO, peruse our site or chat with us today.
