Effective 401(k) Retirement Plan Tips For Working Women
It’s 2018 and it’s the golden era for women in business and women owning businesses. Women entrepreneurs, or small business owners, it’s time to look into funding your own retirement.
According to the U.S. Department of Labor, women are more likely to work in part-time jobs that don’t qualify for a retirement plan. And working women are more likely than men to interrupt their careers to take care of family members. Women work fewer years and contribute less toward their retirement, resulting in lower lifetime savings.
So what’s the solution?
If you don’t already have a retirement plan for your company, there are affordable options you should look into A-S-A-P.
401(k) contribution limit in 2018
The maximum elective contribution limit for 401(k) plans was raised up to $18,500.00.
Elective contributions are fixed stipends you choose to withhold from your paycheck to invest into your retirement plan.
Those who are 50 years or over, should also be familiar with the 2018 limit on catch-up contributions. It’s still $6,000 – it hasn’t changed the past couple years.
We can’t emphasize how important it is to be up-to-date on your company retirement plan, so that you’re ready to retire when the golden years hit.
401(k) Business Benefits
A 401(k) plan for your business empowers you the way the perfect little black dress does – just professionally. When you take action and implement a 401k plan, you’re helping your business and employees, which is actually an investment in your business.
In fact, here’s how a 401(k) plan can benefit your business.
1. Tax Deductions:
You probably already know this, but employer contributions are tax-deductible. That reduces your tax reliability, so you have more money in your pocket. Contributions can also be tax-deferred up to a certain limit. That limit is determined by the IRS and depends on factors such as the contribution amount.
2. Act As Your Own Creditor:
When you have a retirement plan set up, you can effectively take loans up to 50% of the amount you have within your retirement plan. By doing so, this gives you financial freedom and control as your own creditor. This empowers you with more capital for you to invest back into your business as long as you stick to the guidelines!
3. Optional Matching:
Employers are not bound by law to match employee contributions to their 401(k). As an employer, the government will offer you tax incentives for contributing to employee plans. The financial advisor for your retirement plan can advise you in detail on how to maximize your tax-deductions with this.
4. Retains Your Employees:
401(k) plans provide a sense of safety and security, because retirement benefits can be determined at any given point and are protected by the federal pension law. That makes your company more attractive to fresh talent, and incentivizes your employees to stay with your company. Most importantly, when you’re able to retain loyal, long-term employees, you’re also reducing your new employee training costs.
Here’s how to set up a 401(k) plan.
For new plans, you need a company census that has the full names, dates of birth, hire date, and other personal information of your employees to start. A financial advisor will then go over this information with you to help you implement your plan.
For existing plans, you’ll need your fund sheet (408B-2 disclosures), your current statement of investments, and your company census.
Here are 3 quick retirement planning tips to help you stay on top of things.
1. Make your automatic payroll deductions as large as you can
You’ll want to set aside as much of your paycheck as possible, to try and hit the elective contribution limits. This ensures that you have a nest egg well-prepared for your retirement.
2. Use a free online calculator or book a free consultation with a professional financial advisor to estimate and budget your financial savings goals.
Don’t guess – this isn’t grade school algebra. You’ll want your math to be spot on to ensure that you have enough for your retirement.
3. Educate Yourself About Retirement Investing:
Don’t worry, no one was born knowing all of this. In fact, only a small percentage of people are fully aware of all their retirement planning and investing options. If your local community center or city hall offers financial workshops, drop by and take advantage of them! Never stop learning – your wallet will thank you.
Let’s get real for a minute.
As a woman, odds are that people constantly assume that you aren’t financially savvy simply because of your gender.
We know just how hard it is to succeed and put yourself out there as a female business owner or entrepreneur.
In fact, The Storick Group is headed by a female – our very own, Whitney Storick. She’s quite literally beauty and brains. That’s why our company is all about promoting female empowerment. It’s what our company values stand for, and it’s the corporate environment our company encourages.
We offer many retirement plans – from cash balance plans to a variety of 401(k) plans – you name it, we’ve got it. Just reach out to us through phone or email and one of our professional financial advisors will assess and discuss your best options with you – no binding obligation whatsoever!