Employee benefits and retirement plan solutions Trends and Insights 3 affordable ways small business owners can start a retirement plan for employees

3 affordable ways small business owners can start a retirement plan for employees

Offering a retirement savings plan can help employees feel valued and more financially secure. Walk through three options that help simplify the process.

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2 min read |

Considering starting a retirement plan for your employees—but concerned your organization is too small or a plan will be too expensive? You’re not alone.1

Fortunately, starting a small business 401(k) plan could be free with tax credits to cover both the start-up costs and offset matching contributions, thanks to SECURE 2.0 legislation.

Taking advantage of these tax incentives can also help you attract and keep top talent: Employees say after health care, a retirement plan is the most important benefit employers can provide, according to Principal Financial Well-Being Index.2

Here are three realistic small business retirement plan options that can help simplify the process and reduce required resources.

1. Streamline your efforts with a digital, self-serve retirement plan.

Automated options help simplify the initial plan design and purchase process. And ongoing administration is typically quick and efficient.

With Simply Retirement by Principal®, for example, you can get a plan up and running in just a few weeks. While everything can be done online, help is just a phone call away if you need it.

2. Outsource maintenance and access scaled pricing by joining other employers in a plan.

A multiple employer plan (MEP) or pooled employer plan (PEP) is a plan set up for several employers to use at once.

By joining forces with other employers, you can take advantage of group pricing and reduce your involvement by outsourcing time-consuming administrative tasks. This option also shifts some of the fiduciary risk and investment responsibilities off you and onto the plan provider. SECURE 2.0 tax perks apply when you join, even if the plan previously existed.

Ask your financial professional about our PEP offering, Principal® EASE. If you don’t already have one, we can help connect you to a financial professional in your area.

3. Lean on a retirement plan professional.

Prefer to set up your own small business retirement plan? Financial professionals, third-party administrators, and plan service providers can provide support on every step of decision-making and tailor your benefits based on your business plan and budget.

They can help you understand your options and ensure you’re getting the most out of SECURE 2.0.

What's next?

Take the next steps to help grow your business.