In my 25 years working with accountants, I have learned that small business owners lean on their accountants heavily. They will look to them for not only financial advice, but even technology and business development.
Questions about retirement options and 401(k)s are common, and smart accountants need to have answers ready. Here is how to lead your small business clients in the right direction.
Why should I invest in a 401(k) for my small business?
There are two important reasons to consider a 401(k) for your business.
It is one of the best tools for recruiting and retaining good employees. A few years ago, the country went through “The Great Resignation.” What we learned from that is that the current generation of employees want more than just a 9 to 5 job. They want to do work that makes a difference and with a company that cares about them, personally. As a small business owner, you show you care about your employees by taking care of them. That means providing them with benefits, most importantly, retirement benefits. The feeling of financial security helps employees worry less and engage more at work.
Federal SECURE 2.0 Tax Credits: The government has rolled out significant tax credits to help small companies offer retirement benefits, available to businesses with 100 or fewer employees:
- Startup Administrative Credit: Covers up to 100 percent of ordinary administrative and setup costs, up to $5,000 per year for the first three years.
- Auto Enrollment Credit: Provides an additional $500 per year for 3 years if you include an eligible auto enrollment feature.
- Employer Match Credit: Additional tax credits of up to $1,000 per employee to help offset employer matching contributions over the first several years.
What are the state retirement mandates I have been hearing about?
About half of all employers in the United States live in states where offering retirement is no longer optional, it is mandatory or will be soon. That puts a lot of stress on employers to figure out their responsibilities in becoming a plan sponsor. It can be overwhelming to be faced with researching options, trying to understand responsibilities, and executing all of the tasks related to sponsoring a plan.
401GO actually began in response to this same overwhelm. CEO Dan Beck, when looking for a retirement plan for employees of another company he owned, experienced what so many other small business owners experienced when starting a 401(k). He discovered that navigating the responsibilities and cost of starting a retirement plan for his company was difficult and frustrating, and that there were no options aimed at helping small companies.
Thus, 401GO was born and we have been helping small businesses by taking that stress away. 401GO steps in and performs almost all of the compliance related to sponsoring a 401(k), relieving the burdens of the sponsor so they can focus on running their business.
I want to start a 401(k) but how do I get started?
That is an easy question and one I love to answer. Simply send them my way and we will take care of them from start to finish. I work with some of the most talented people on the planet and they have worked with thousands of people in companies starting new small business 401(k) plans. Our Plan Consultants can answer questions and walk someone through a plan setup in about 15 minutes.
Accountants can have an easy answer for their clients by partnering with 401GO, and learning what we have to offer compared to others. Then you will be a hero to your clients by giving them not only a quick solution to their problem, but a good one too. They will be thrilled at your expertise and you will have another happy customer.
I want to move my current plan to another provider. How do I do that?
Tell your client to WAIT before taking any further action. You cannot simply shut down a plan and start a new one. If you do, you will be restricted from opening the new plan for 1 year, and that is a blemish you want to avoid. So, send them my way so we can help walk them through this process.
401GO has a great process for transitioning a small business 401(k) plan from an old provider. We do it with minimal disruption to employees, and we even have a team of experts in place to help.
Prepare Your Answers
Accountants should be ready for these questions, and have some good answers prepared. To learn more about how a partnership with 401GO can benefit you and your clients, visit our official Pricing Page or contact us today.