Retirement plans are among the most requested benefits by workers, according to Forbes Advisor.
The survey, put together by retirement plan provider ShareBuilder, looked at 500 small businesses with up to 50 employees and found that many companies said they couldn’t afford a company match or simply perceived 401 plans to be “too expensive.” A 401 is a retirement plan that allows employees to make contributions to their retirement while also deferring taxes.Experts in the retirement space offer other reasons that companies may not be on board.
“It’s a lack of awareness,” said Christopher Zeoli, a vice president at Berwyn’s OneDigital, which offers retirement plan services. “There are too many myths around these plans that need to be better explained to business owners.”It’s true that the costs for setting up a 401 program at a company can range anywhere from $500 to $2,000. The annual costs paid for an outside administrator also need to be considered; most charge based on the asset values of the plan. But thanks to the“The SECURE 2.
Will employees be required to contribute? Not yet. But beginning in 2025, employers will be required to automatically enroll their new employees in their retirement plan with a minimum contribution of 3% of their wages. The default contribution rate for a RetireReady NJ account is also 3% of an employee’s gross pay. However, employees can choose to opt out.
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1,000+ Google Employees Urge Company To Divest 401(k)s From Fossil FuelsRichard Nieva is a San Francisco-based senior writer who covers technology. He joined Forbes in 2022 and covers public companies and artificial intelligence. Previously, he wrote for BuzzFeed News, CNET and Fortune Magazine, and his work has been featured in The New York Times, CNN and the Columbia Journalism Review.
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