You’ve probably noticed, retirement providers for small business are the hot thing in town right now. As a certain New York Times article recently pointed out, “401(k) plans tend to be too costly for companies with less than $10 million in plan assets.” There’s clearly a market for low-cost, easy-to-use 401(k)s for small businesses, but a few providers definitely stand out.
- Employees can save more through a 401(k): “The advantage of a 401(k) […] are higher pretax contribution limits than what IRAs or SEP-IRAs allow, more flexibility if the employer wants to contribute and, typically, employees can borrow from their plans. IRA participants can’t.”
- Employers needn’t worry about the legal liability generally associated with their 401(k) plan anymore: “One of the big advantages of working with either of these companies is that they assume the fiduciary responsibilities. They — not employers — agree to put the savers’ best interests first. If something goes wrong, they have to deal with legal repercussions.”
- Everything’s automatic: “These firms work with the vendors that manage payroll. This cooperative effort allows your savings to be automatically deducted from your pay.”
In other words, suggest these options to your employer and urge them to check them out.
To see the full article, visit Bankrate’s Retirement blog.