For business owners and employees alike, the pandemic has wreaked havoc on our incomes, savings and our retirement fund. With a need to stay afloat in tough times, saving for the future was put on the back burner, and for many, it still is and will be for some time.

The tough times we are facing aren’t going to change the fact that one day, the years are going to sneak right by you and you’re going to be looking at retirement. You’ll look back to this time and wish you had salted just a little more away each week. Even $10 a week can add up over the years, if it’s put in the right investment account.

It’s also a smart business strategy.

A recent survey of small businesses showed that hiring a highly motivated, skilled workforce was top of mind even during these tough economic times. Even in an employer’s market, top performers still want perks as part of their compensation package. As a small business struggling to make ends meet, you may not think you have the resources to set up a retirement plan for your employees and yourself. You may think they are difficult or costly to set up or administer. But that’s not necessarily true.

Moreover, a retirement plan can save you and your employees money at tax time. As a business owner, the IRS offers a tax credit to convince you to start a 401(k) plan for your company. If you have fewer than 100 employees, you can write off up to 50% of the startup costs of a new plan and $500 per year for the first three years after.

If you participate in the plan as an employee, you can save on your personal taxes, too. By setting aside a certain percentage of your salary (up to $19,500 in 2021, or $26,000 if you’re 50 years or older) into your 401(k) account, you can lower your taxable income now and defer paying taxes on that money until you withdraw it in retirement.

If you decide to offer a 401(K) with an employee match, you get an additional benefit. Businesses can deduct employer contributions to a qualifying plan as a business expense. You could, for example, choose to offer to match any savings made by employees up to 4% of their annual salary and deduct that contribution.

Let’s do a little more math on this…

Employees can contribute up to $19,500 to their 401(k) plan for 2020 and 2021. Anyone over age 50 can contribute an additional $6,500. With a traditional or Roth IRA, your total contribution to the account can be $6,000 in 2020 and 2021 if you’re under age 50 or $7,000 in 2021 if you’re age 50+. These contributions are deferred and not taxed.

Over time, even a little can add up to a lot. If you were to save just $100 a month every month beginning at 25 years of age you’d have $343,000 at age 70, based on a modest 7% return rate. At 35, however, that same $100 per month will create a nest egg of just $166,000; at 45, only $76,000, everything else being equal. Add in Social Security and any other investments you have – real estate, for instance – and that hundred bucks a month can be the difference between living in your daughter’s basement and having a waterfront home in Daytona Beach, Florida.

To help employers attract the best employees and put away a little for themselves for that inevitable day when you no longer punch a clock, Commerce developed the Retirement Marketplace. Here, employees and employers alike can shop for the perfect 401(k) or IRA retirement plan. You can even compare the different plans to see which one best fits your needs.

If you’re an employer who wants to set up a plan for their employees, there are no employer fees and the setup process is a snap. Once you’d decided on a plan, click on the link, and you’ll work directly with the financial firm that offers it. Each firm is vetted and approved by the state, so you can be confident that your plan will be in good hands.

The bottom line is that your company’s success is tied directly to the quality of your workforce, which these days is one of the top priorities of any business owner. Giving your employees a suite of benefits, including a retirement plan, is a great way to ensure they feel valued, are engaged, and want to stay with you long term.


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The Small Business Retirement Marketplace is administered by the Washington Department of Commerce as established in RCW Chapter 43.330.730-750. Plans carried on the Retirement Marketplace are verified by the Department of Financial Institutions and/or the Office of the Insurance Commissioner to meet the requirements set forth in RCW 43.330.732(7) and 735(6)(a).

Enrollment in plans on the Retirement Marketplace is voluntary. Plan enrollment is managed by private financial services firms. Saving through certain plans will not be appropriate for all individuals. Employer facilitation of most retirement savings plans carries certain legal obligations for which employers are entirely responsible. Contributing to a retirement savings plan may offer tax benefits and/or consequences. Other private sector plans not offered on the Retirement Marketplace may charge lower fees. Consult your tax or financial adviser with questions related to investments.

The trademarks and logos appearing on this page are owned by the respective companies named or depicted herein, and are used here by permission.

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