6 Advantages of Starting an Employer-Sponsored Retirement Plan

Employees dedicate their talents and time to their work, and as an employer, you want to reward them with a secure retirement. Additionally, you want to offer competitive benefits to attract new talent. One of the best choices you can offer your workers is an employer-sponsored retirement plan because it allows employees to save steady amounts of money over long periods. If you are unsure about this option, consider the following six advantages that come with creating group retirement plans.

1. Minimal Contributions

The amount of money you have in retirement relies, in part, on how much you save throughout your career. However, it can be more challenging to save when you are younger and make less money. Employer-sponsored retirement plans typically do not have minimum contributions, making them easier for employees to participate right away.

2. Tax-Deductible Contributions

Employer contributions to these retirement plans are tax-deductible and may come with additional tax credits. This benefit helps you cut costs and devote resources to more productive efforts.

3. Easier Savings

No business wants to see an outstanding employee retire later than they anticipated, yet this may happen if they do not have adequate retirement savings. The simplicity of payroll deduction for retirement savings allows employees to establish an automatic savings discipline.  Additionally, employees can be encouraged to increase their savings rates over time or the plan can establish scheduled automatic increases to their savings.

4. A Tool to Attract and Retain Employees

Offering an attractive retirement plan allows organizations to stand out among potential recruits.  It signifies that the company cares about its employees and their overall financial wellness. Employer-sponsored plans help deliver the long-term motivation people need to join your staff and accept a permanent position. They also help you avoid turnover and save time and money training people who leave shortly after getting hired.

5. Opportunities for Employees to Earn “Free Money”

Employer-sponsored retirement plans typically allow employees to participate or stop participating at their discretion. Often, employees can earn “free money” in the form of an employer match or profit-sharing contribution to add to their own salary deferral savings. This incentive can further encourage potential candidates to accept and keep a job.

6. Increased Account Balances

Employer-sponsored retirement plans are an ideal option even if your employees are good savers. Since these plans typically feature lower fees than individual accounts, savings can grow more quickly and lead to higher account balances by retirement. The more savings employees have, the more financial security they will likely have in retirement.

Employer-Sponsored Retirement Plan Offered by Moneta

If you need help creating a retirement plan for your organization, turn to Moneta for customized solutions. Our team of retirement specialists provides high-touch assistance, objective advisory services, fiduciary assistance, and comprehensive participant education to develop a plan that meets your employee’s needs.

We are a fee-only Registered Investment Advisor (RIA) with over 30 years of experience serving clients nationwide.

Contact us to learn more about retirement plans and our other consulting services.

© 2022 Moneta Group Investment Advisors, LLC is an SEC-registered investment advisor and wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax, or legal decision. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

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