Act now and secure your employees’ future with a 401(k) plan

Do you own a business? Do you live in a state that mandates retirement plans? According to Leading Retirement Solutions [1] as of 2022, several states have passed laws mandating retirement programs, implemented such programs or scheduled implementation of these programs, including:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maine
• Maryland
• Massachusetts
• New Jersey
• New Mexico
• New York
• Oregon
• Vermont
• Virginia
• Washington

While requirements vary by state, employers are not required to use the plan offered by their respective state. However, employers must offer a comparable plan and, in some cases, auto enroll employees. So, employers living in the above states are required to provide a plan, but really, all business owners should consider the advantages of offering a retirement plan.

Why?

Retirement plans are a key element to providing a comprehensive benefits package. They are designed to secure your employees’ financial futures while contributing to your business’ appeal and long-term success. Offering a 401(k) plan can help you attract and retain employees. Not only will you stand out in the job market, but you’ll attract employees that value financial security. You’ll also foster a culture of financial responsibility and empower your employees to take control of their retirement savings.

In addition, there are exclusive benefits for companies that are starting a new plan. If you are establishing a new plan, and you had 50 or fewer employees in the preceding year, your company may receive a three-year tax credit to offset 100% of the start-up costs with a potential maximum credit of $5,000 per year. An additional five-year tax credit for providing employer contributions would also allow you to earn up to $1,000 for each employee making less than $100,000. This credit starts at 100% for years one and two and then decreases by 25% each year. After the fifth year, there is no longer a tax credit.