Small businesses can benefit from offering 401(k) plans

For years, many small business owners assumed that offering a 401(k) plan was too costly, too complex, or simply out of reach. Running a business is already demanding, and adding employee benefitsto the list can feel overwhelming. But with recent changes under SECURE 2.0, offering a retirement plan is now more accessible and affordable than ever—making it worth rethinking old assumptions.

More businesses are adopting 401(k) plans

While fewer than one in four small businesses currently offer a 401(k), this number continues to rise as new incentives make plans easier to implement.

Tax credits can significantly lower startup costs

• Businesses with up to 100 employees may qualify for up to $5,000 per year in tax credits for plan startup costs—for the first three years.
• There is an additional credit of up to $1,000 per employee for employer contributions.
• Employees generally qualify if they earned at least $5,000 in the prior year.

Automatic enrollment boosts participation

Auto-enrollment is now standard for most new 401(k) plans, helping more employees start saving immediately and improving overall participation rates.

A 401(k) can strengthen your business

• A well-designed retirement plan can help attract and retain top talent.
• Plan expenses and employer contributions are typically tax-deductible, helping lower taxable income.
• Flexible, affordable options mean even the smallest teams can find a plan that fits their needs.

Offering a 401(k) is no longer the administrative or financial burden it once was. With today’s incentives and streamlined options, now is an ideal time for small businesses to explore what’spossible. Speak with a financial or benefits advisor to design a plan that supports both your employees and your long-term goals.