Unlocking the Future: Why Setting Up an Employer-Sponsored Retirement Plan Before 2025 Is a Smart Move

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In today’s competitive job market, offering a robust benefits package is essential for attracting and retaining top talent. One of the most valuable benefits you can provide is an employer-sponsored retirement plan. With recent changes in tax laws, now is the perfect time to consider setting up a retirement plan for your employees—especially before 2025. Here’s why.

Maximize Tax Incentives. The U.S. government has introduced several tax incentives to encourage small and medium-sized businesses to establish retirement plans. SECURE Act 2.0, passed in 2022, significantly enhances these benefits. Businesses that establish a new retirement plan can receive a tax credit of up to 100% of the plan’s startup costs, up to a maximum of $5,000 per year for the first three years. Additionally, there’s an extra credit of $500 per year for adding automatic enrollment, which further boosts the potential savings.[1]

Stay Ahead of Regulatory Changes. Tax laws and retirement plan regulations are constantly evolving. By establishing a retirement plan now, you can lock in current benefits and avoid potential future regulations that could make setting up a plan more complex or less advantageous.

Attract and Retain Top Talent. A solid retirement plan is a key factor for employees when choosing an employer. By offering a 401(k) or similar plan, you not only attract high-quality candidates but also increase employee loyalty and satisfaction. Employees are more likely to stay with a company that invests in their long-term financial well-being.

Boost Employee Productivity. Financial stress is a significant burden for many employees, impacting their focus and productivity at work. By providing a retirement plan, you help your employees secure their financial future, which can lead to a more engaged and productive workforce.

Enhance Your Business Reputation. Offering a retirement plan signals to your clients, partners, and the community that your business is stable, forward-thinking, and committed to its employees. This can enhance your company’s reputation and make it more attractive to potential business partners and customers.

Plan for the Future. The sooner you set up an employer-sponsored retirement plan, the more time your employees have to benefit from compounding interest, leading to larger retirement savings over time. Additionally, with the 2025 deadline for maximizing certain tax incentives, taking action now helps ensure you won’t miss out on these valuable benefits.

Setting up an employer-sponsored retirement plan before 2025 is not just a smart financial decision for your business; it’s an investment in your employees’ futures. The tax incentives available today, combined with the long-term benefits for both your business and your employees, make this an opportunity you can’t afford to miss. Take the first step now, and set your business and your employees on a path to a secure and prosperous future. Contact CoSource Financial Group today to get started.


[1] irs.gov

Retirement plan withdrawals may be subject to taxation and penalties when withdrawn early. Employees who withdraw funds in a 401(k) plan before age 59½ may have to pay a 10 percent tax on any withdrawals, in addition to any regular income tax.

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