If it’s time to nudge your employer into exploring retirement plan options, making the suggestion doesn’t need to be stressful. Here are four ways to start a conversation with your employer that keep everyone’s interests in mind:
- Matching is optional. For a small company, offering a 401k may seem daunting because the cost of offering a plan is simply not in the budget. After all, providing a matching contribution to all employees who participate in the plan can get expensive. However, while matching contributions are a great benefit for employees, providing a match is entirely optional. Many small companies chose to start a plan without providing a match so that their team can at least begin to save on their own. This keeps plan costs to a minimum, which for start-up plans can be just a few hundred dollars per employee.
- Receive a tax break. The government offers generous tax breaks to founders who offer retirement plans. Companies don’t pay any payroll tax on contributions to a retirement plan, and they receive a $500 annual tax credit to offset any plan costs over the first three years. Founders and team members also receive personal tax breaks for every dollar they put in a plan.
- Everyone does better at work. Financial anxiety is real and it has a negative effect on employees. A Price Waterhouse Cooper (PWC) study showed that more than half of employees report being stressed about their finances, while 45 percent cite it as the biggest source of stress in their lives. Some 37% of Millennials say they are distracted about finances at work, and nearly half of them spend three working hours each week thinking about their personal finances. Companies that help employees build financial confidence will be rewarded with a happier and more productive team.
- Attract and keep talent. Finding and holding onto key employees can be difficult if they are feeling financially neglected. In fact, 67 percent of millennials would leave their current job to find another with better benefits. According to the same PWC study, only 44 percent of employees believe their employers care about their financial well-being. Establishing a retirement plan is a simple way for employers to show that they are committed to their employees and to building an attractive company culture.
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