Businesses intent on providing excellent benefits packages to employees may want to evaluate plan options to ensure staff are receiving the right offerings. A corporation employing a large number of 20 to 30 year olds may want to reconsider providing access to benefits that are more apt to meet the needs of professionals considering retirement in the near future.
Employee benefit consultants can help a business identify which services to offer.
Here are three retirement plan options to consider:
1. 401(k). A 401(k) is a rural cooperative savings plan that employees can elect to contribute a portion of their paycheck to. This savings option meets requirements set by the Internal Revenue Service (IRS) that allow eligible employees to delegate funds to the savings account before taxes. Employers have the option of either meeting what employees put toward the retirement plan or contributing a percentage.
2. 403(b). A 403(b) or tax-sheltered annuity plan is a retirement option for employees of public schools or certain tax exempt organizations. It can be provided in a contract through an insurance company, a custodial account invested in mutual funds or a retirement income account. One of the key benefits of this retirement plan is the exclusion of income tax on all contributions until withdrawals are made.
3. Traditional IRA. Consider offering employees the ability to open a tradition or simple IRA. The compensation allows young and old employees to save strategically for the future. Employees can put un-taxed income into a savings account, where it will accrue interest until an individual takes it out.
HR professionals can gain feedback from employee benefit consultants to ensure everyone has access to the appropriate savings plan.
