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Are Your Small Business Clients Aware of the Strategic Benefits of a 401(k) Plan?

Why a 401(k) plan can be a smart choice for your small business clients who want to attract and retain good employees. And is a 401(k) more
cost-effective than a SIMPLE IRA?

August 18, 2008
Sponsored by Paychex

Company benefits are linked inextricably to attracting and retaining good employees. One particular strategic benefit small businesses should consider is a 401(k) plan. Enhance your client relationships by ensuring they are aware of their options and responsibilities. By proactively reaching out to them, your value to them increases.

Why a 401(k) plan could be right for your small business clients:

  • Defers tax on plan earnings until money is withdrawn
  • Reduces employee taxable income
  • Often allows small business owner to contribute more to their own retirement accounts than other types of plans
  • Safe harbor rules permit certain contribution limitations to be disregarded
  • Ability to take a loan
  • Ability to make a profit-sharing contribution
  • Opportunity to include a Roth elective deferral feature

Can a 401(k) Be More Cost-Effective Than a SIMPLE IRA?

Do some of your small business clients have a SIMPLE IRA? If so, have you reviewed the differences between that type of plan and a 401(k) with a safe harbor feature? When you add up the incremental tax savings of a 401(k) and how much more your clients’ employees can save for retirement, you’ll see why a 401(k) is a smart retirement option for your clients and their employees. 401(k) plans are more flexible, and higher contribution limits are permitted.

No Employees? No Problem

Everyone should have the opportunity to plan for retirement. Even the smallest of your business clients can benefit from a 401(k) plan — even those with no employees. Owner-only companies can establish a 401(k) plan that also permits additional employees to be part of the plan if they are hired, so their plan grows as their business grows.

Take Another Look at 401(k) Plans for Your Clients

Paychex 401(k) retirement plans are affordable, simple to set up and maintain, and extremely easy to administer. There is a good reason so many businesses choose Paychex as their retirement plan administrator — Paychex is one of the industry’s largest 401(k) recordkeepers with over 47,000 retirement service clients.

With a Paychex 401(k) plan, your clients can enjoy:

  • Full integration with Paychex payroll
  • A wide range of investment options and fund choices — thousands of funds from major fund families, enhanced trustee services, and the protection of a named fiduciary
  • Safe harbor option is available to eliminate the need to perform certain compliance testing
  • Employer/Employee Web availability allows 24-hour access to your retirement account

With Paychex Retirement Services you can provide your clients — no matter what size business — with top-notch advice tailored to their needs, as well as a broad range of competitively priced plan options for meeting those needs. These services not only provide you with resources to help meet their retirement goals, but also preserve your role as the primary relationship manager.

For more information, visit Paychex.

Paychex is proud to be the preferred provider of payroll and retirement plan services for CPAs through the AICPA Business Solutions Program.