For small business owners, it’s a great feeling when you’ve grown your company to the point of being able to offer comprehensive benefits, especially a quality retirement plan, to your employees. A retirement plan benefit is also a great way to attract and keep talented team members. However, identifying and setting up a retirement plan can be daunting and often intimidating, and there is a general feeling among small business owners that there may not be a retirement plan that fits their needs.
There are three widespread misconceptions about retirement plans we hear from business owners:
“My options are limited.”
There is only one option - most people know "401(k)" and that is all they know. In truth, there are many other retirement plan options for small businesses, many of which are simple and inexpensive to maintain. A good financial advisor can also customize your retirement plan for your specific needs, long term growth goals, and employee opportunities.
“This is going to cost me a lot of money.”
Many entrepreneurs are concerned about potential cost of setting up and maintaining a retirement plans. They are not free (or cheap), but the vast majority of plans are agreed upon because the tax savings outweigh the cost of plan maintenance. It’s an investment in the long term foundation of your company. When you start to look at retirement plan options, make sure you are understanding the benefits, not just the cost.
“Setting up a retirement is too complex and time-consuming.”
Are retirement plans complex? At first glance, maybe. There are a lot of numbers and factors to consider when shopping around for plans if you choose to take on that task yourself.
However, in most situations, there will be a retirement plan administrator. They exist to translate plan options, talk numbers, and help you get back to what you enjoy doing the most while still keeping you informed about how your retirement plan is working for you and your employees. A great plan administrator will guide you and answer any questions - that is what you are paying them for.
Even after a little demystifying you may be left wondering, “Where do I start?”
That’s where financial advisors come in. A financial advisor should be to offer guidance, but if they are speaking in jargon and acronyms, it could just be more confusing. Make sure the advisor you’re talking to is willing to slow down, express patience in explaining concepts, and can illustrate exactly how each plan option works.
We are excited to announce we are rolling out a new business retirement plan service, Conscious-k, in collaboration with a TPA (third party administrator). This administrator works with us and you to make sure that you have the best options to consider when shopping for a business retirement plan that makes sense for you.
Ready for a business retirement plan that gives back to your employees and aligns with your values? Check out Conscious-k for more information and to schedule an initial consult.