Why a 401(k) makes sense for small businesses

Many small business owners assume a 401(k) is only for large companies with an HR department and a big budget. That was true once. It is not true now.

Under the Secure 2.0 Act, a business with up to 50 employees can claim up to $5,000 a year in tax credits for the first three years of a new plan. For many small plans, the credit covers most of the cost.

A 401(k) also helps you hire and keep good people. When two job offers pay about the same, the one with a retirement plan often wins.

Newer platforms automate compliance testing, payroll integration, and enrollment. That removes most of the 80 or more hours a year that a traditional plan takes. If you have been putting this off, the math has changed in your favor.