6 myths and a few truths about implementing a 401(k)

December 5, 2012

As a small business owner, you need every advantage available to compete with larger companies to recruit and retain talented employees. One of the easiest ways to get in the game is to offer a 401(k) plan—a means for your employees to save for retirement at work. A recent study found that access to a retirement plan is a major factor in the decision of an employee to stay with or join a company. However, many small business owners who don’t offer a plan cite obstacles in their reasoning. Ultimately, the majority of those obstacles turn out to be misconceptions that people falsely buy in to:1. There is a mandate to match contributions. Many business owners falsely believe that one of the requirements of a 401(k) is that they must match employee contributions. This couldn’t be further from the truth. If you’re not interested in matching— though it’s something that I highly encourage —all you have to do is institute the plan and let employees put their hard-earned money toward their retirements.

2. The fees I’ll have to pay will be through the roof. Most plans weren’t designed with small businesses in mind; they cater to large corporations that have hundreds, if not thousands, of participants. There are flat-fee plans designed for… Read more…

(Little note from CIP: Remember that you can convert or create your IRA so you can “self-direct” it and invest your funds into many different investment vehicles, including real estate and multi-family properties!)

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