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Booming 401(k) Benefits for Businesses Employing Millennials

October 2016
A partner of Naden/Lean LLC, Bruce Caulk provides professional services to business in numerous industries. With 25 years of experience in public accounting, Bruce has extensive experience and relationships in the assurance and tax fields, as well as finance management, operation development, software review and consultation, tax planning, tax strategy consultation, succession planning and many other consulting service areas. Bruce maintains direct and consistent involvement with his clients, which allows for complete accessibility to discuss and advise on matters of importance.

A partner of Naden/Lean LLC, Bruce Caulk provides professional services to business in numerous industries. With 25 years of experience in public accounting, Bruce has extensive experience and relationships in the assurance and tax fields, as well as finance management, operation development, software review and consultation, tax planning, tax strategy consultation, succession planning and many other consulting service areas. Bruce maintains direct and consistent involvement with his clients, which allows for complete accessibility to discuss and advise on matters of importance.

You’ve heard about the baby boom, but what about the 401(k) boom? From a single plan created in 1980, today there are more than 600,000 401(k) plans and similar types of defined contribution plans in the United States. With such growth and popularity, every business should consider implementing some form of defined contribution plan. This is extremely important for businesses with a high percentage of millennials on staff as this generation has the most to gain from their 401(k) accounts.

What Are Defined Contribution Plans?
A defined contribution plan is a type of employer-sponsored retirement plan in which the amount the employer contributes is defined, but the amount of benefit the employee receives at retirement is not.

401(k) Benefits
The most popular type of defined contribution plan by far is the 401(k) plan, for large and small companies alike. The amount that business owners and employees can contribute to a 401(k) plan on a pre-tax basis each year is higher than many other types of individual retirement accounts. This is a great advantage for millennials as they have the option to start investing early. Annual contribution limits for 401(k)s and similar plans adjust over time and currently range up to $24,000 per year.

Profit Sharing Plans
Another defined contribution plan that allows employers a way to increase contribution limits is a profit-sharing plan. With these plans, employers can add a portion of the company’s prior-year profits to employee retirement savings plans. These employer contributions help boost pre-tax savings for all employees and are tax deductible for the business.

Is it boom time for you? Reach out to your trusted professional advisors and explore implementing a 401(k) plan today! I95

Naden/Lean LLC
410-453-5500
www.nlgroup.com

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