3 Benefits of Selecting the Right Company Retirement Plan

3 Benefits of Selecting the Right Company Retirement Plan

By Ed McClure, CFP®, PPC®

Some employers don’t realize the extent to which their companies’ retirement plans play a key role in the overall business—but the way you pay people shapes the company’s culture. 

People don’t think about their retirement plans every day, but people really begin to feel the impact when they are a few years from retiring. The goal is to get the right foundation in place long before that time. The type of plan you choose and the way you educate your employees about their retirement plans can have a significant long-term impact on your company’s performance and your financial future as the owner.

Attract the Right People and Keep Them Motivated

High-earning employees (typically executive management) tend to start running into more complicated tax issues. Providing the ability to save for retirement in the right types of vehicles can improve your company’s competitive edge when recruiting for senior leadership positions. 

There are numerous ways to incentivize performance, such as paying bonuses as deferred compensation and creating ways for employees to draw income after retirement. 

And, even with more typical plans like 401(k)s, there are factors that can play a role in your company’s ability to attract the right employees, such as whether you offer company matching, whether you automatically enroll participants, how soon employees can join the plan, and how many options you provide. 

Keep in mind, training and coaching play a crucial role for employees at every rung of the company.

Set Up Your Employees for Success

Employees often don’t understand how their plans work or what their investment options are. When we work with employers, part of our role is educating plan participants and being available for employees to call when they’re trying to figure out what they should do. 

In the recession that followed 2008, I remember getting countless calls from people who wanted to pull all of their money out of the market. Most of the time, I was able to convince them not to do that. In many companies, employees don’t have anyone to call except the plan provider’s 800 number, where they will talk to someone who isn’t allowed to give investment advice. When employees have resources available, they get a better impression of your company as a whole.

Retire When You Want To

Have you worked out the numbers to figure out when you will be able to retire? Do you know how much you need to put away each year? Do you know whether or not you are on track to retire when you want? For business owners, we often find that they are not putting nearly enough away because of the way their plans are structured. The right kind of plan can ensure that you are funding your plan to the maximum extent possible. Some companies can use a defined benefit plan, but, even if you can’t, I often identify better options than what a company currently has in place.

I’m Here to Help

When you’ve done the hard work to build a great company, the right retirement plan helps you to capitalize on what you’ve created. There are a lot of moving pieces that go into company retirement plans. I find it rewarding to walk people through the numbers and see the looks on their faces when they realize what they can achieve; I enjoy doing the same thing for the owners and the employees of a company. 

If you’d like me to take a look at your company’s retirement plan and give you an assessment of whether or not you have the right vehicle in place, give me a call at (760) 607-0611 or email [email protected] to set up a consultation.

About Ed

Ed McClure is a CERTIFIED FINANCIAL PLANNER™ practitioner, Professional Plan Consultant® (PPC®), and founder of McClure Wealth Management. With over 25 years of experience, Ed works with business owners who want to maximize their retirement plan benefits, businesses that need help setting up and managing a 401(k) for their employees, and families who want guidance while planning their futures. He is known for simplifying complicated and intimidating topics and making wealth management concepts easy for others to remember and understand.  

Ed has established himself as a trusted resource for business owners and individuals, and his mission is to help his clients achieve the financial independence and well-being they deserve so they can give their time and energy to the people and things they love. He has a bachelor’s degree in finance from the University of Illinois. In his spare time, Ed conducts financial workshops for the Just In Time for Foster Youth organization, which helps equip young men and women as they come out of the foster care system. He also loves to travel and spend time with his favorite people. To learn more about Ed, connect with him on LinkedIn.