News

As a small business owner, you’re constantly making decisions that impact your bottom line. One choice that often gets delayed or overlooked entirely is implementing a retirement plan. 

At Hunter Benefits Consulting Group, we’ve seen firsthand how postponing this decision can silently cost businesses more than they realize. Here are three major ways not offering a 401(k) plan could be hurting your company: 

1. The Hidden Cost to Talent Acquisition and Retention 

Have you ever considered how many qualified candidates have never applied to your business because you don’t offer a retirement plan? 

Today’s workforce is more informed than ever about total compensation. They know: 

• A salary with a retirement plan is worth more than one without 

• Employer matching contributions are a powerful incentive 

• The match formula and vesting schedule directly affect their long-term financial security 

In fact, “401(k) offered” is proudly displayed on job listings and signage in your own community. On the other hand, we’ve never seen an employer boasting about their participation in state-mandated programs like Illinois Secure Choice. 

And here’s the bottom line: the cost of hiring and training a new employee is significantly higher than the cost of offering a competitive benefits package that includes a 401(k). A well-structured plan not only attracts stronger candidates but also helps keep them around. 

2. The Missed Tax Advantages 

Implementing a 401(k) plan doesn’t just benefit your employees, it can bring direct financial advantages to your business: 

• Start-Up Tax Credits: The SECURE Act offers generous tax credits to small businesses starting a new retirement plan. These can total up to $5,000 per year for the first three years. 

• Auto-Enrollment Credit: Add another $500 per year for three years if your plan includes automatic enrollment. 

• Matching Contributions: Employer contributions are tax-deductible, lowering your business’s taxable income. 

That’s real money back in your pocket, and in some cases, the tax credit alone could cover most, if not all, of your plan’s startup costs. For some businesses, the first-year cost of a 401(k) plan effectively drops to $0, while providing employees with a meaningful benefit and incentive to stay. 

3. The Impact on Your Personal Financial Future 

As a business owner, your financial goals matter too. A 401(k) plan provides tools and flexibility that other retirement plan simply can’t match: 

• Higher Contribution Limits: 401(k) plans allow for much higher annual contributions than SEP or SIMPLE IRAs, particularly beneficial for owners born in 1975 or earlier who qualify for “catch-up” contributions. 

• Roth Options: Unlike other plans, 401(k)s can include Roth contributions, giving you post-tax savings options even if your income disqualifies you from contributing to a Roth IRA. 

• Custom Plan Design: With the right design and employee demographics, we can tailor your plan to maximize benefits for owners and key employees while remaining compliant with IRS rules. 

Beyond the Off-the-Shelf Solution 

Fintech platforms may offer basic, DIY plan options, but we go beyond the “plug-and-play” approach. Think of those solutions as a plastic bag filled with 100 Legos with no instructions. 

We bring the blueprint, the expertise, and the support to design and manage a retirement plan that aligns with your business goals, so you can stay focused on running your business, not decoding plan compliance. 

Ready to See the Numbers? 

Our tax credit calculator can help you estimate how much your business could benefit from starting a 401(k) plan. You may be surprised at how affordable it is. 

Don’t let another year go by while hidden costs chip away at your talent, your tax savings, your bottom line, and your own retirement future. 

Contact Hunter Benefits Consulting Group today to see how a properly designed 401(k) plan can be a strategic advantage, not just a benefit.