1. Attract and retain key employees
It has become essential to attract and retain key employees by offering a retirement plan in today's work environment. By keeping employees, you may reduce the cost of training and maintain your competitive edge.
2. Make sure employees are on track for retirement
Saving for retirement can be simple. Many studies have shown that financial stress negatively impacts employees' ability to focus and be productive. By offering a retirement plan, you help improve your employees' lives and strive to improve your business as well.
3. Tax Perks
401k plans also can lower your tax burden when tax season comes around. Matched contributions are one aspect of a 401k plan that can be a tax deduction.
1. Compound Earning (Rule of 72)
Albert Einstein once said, "Compound interest is the eighth wonder of the world." This is very true for retirement savings. The rule of 72 is the rate money doubles. Money may double every ten years if an investor earns 7.2% each year. Conversely, money may double every 7.2 years if an investor earns 10%. The longer you save, the greater chances for compounding to build a more comfortable retirement.
2. Improve financial confidence
Reducing physical and mental financial stress may be achieved by saving into a company's retirement plan. A 401(k) plan can offer the ability to borrow from themselves and pay themselves back the loan over time, including interest. Also, there are financial tools available to view and track their own progress.
3. Contributions can be automatic
Employees can contribute to their retirement plan automatically through payroll, making it easy to save.