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According to the 2023 Small Business Retirement Index, only 34% of small employers currently offer retirement savings, and of those who do not, almost half say that they cannot afford to offer a plan. Another 22% say they are too busy with other aspects of their company to set up a company retirement plan, and 21% say they do not know how to start the process of setting up a plan.
Business experts suggest that in this challenging labor market employers who offer retirement benefits could stand out from the crowd. Retirement solutions that can work well for small businesses include:
- Self-Employed 401(k)s are best for small business owners with no employees, aside from a spouse, funded through employee deferrals and contributions
- SEP IRAs are best for self-employed business owners or those with a few employees, funded by employer contributions
- SIMPLE IRAs are funded by employee deferrals and contributions and can provide a tax-deferred benefit to the employer
- Pooled Employer Plans (PEPs) are designed for small businesses, allowing multiple unrelated employers to participate in one 401(k) plan
Planning benefits for your employees is important, but don’t forget to plan for your own retirement and tax savings! Studies show when it comes to retirement, 83% of small business owners say they should be saving more for retirement, but 59% are not sure how to maximize these savings. When you combine the different strategies from our DeTax University program you are guaranteed to save over $10,000 a year on taxes.