4 Reasons to Choose Automatic 401k Enrollment for Your Small Business

Automatic 401k enrollment is a process that companies can use in order to automatically enroll every eligible employee into the company 401k plan. Here are a few reasons to consider choosing automatic 401k enrollment for your small business.

1. Tax Benefits

One of the biggest benefits of automatically enrolling everyone in a 401k is that you will be able to help your tax situation. Matching contributions to your employees' accounts are tax-deductible. If you contribute more money to their accounts, you will get a bigger tax deduction.

2. Attract and Retain Talented Employees

If you want to get the best employees and keep them, you need to offer a nice benefits package. This type of retirement plan can be attractive to employees if they know that you will be providing them with a nice contribution match.

3. Increases Plan Participation

Automatically enrolling employees will have the effect of increasing plan participation. This is good news for highly compensated employees in your company, as it means that they will most likely be able to make a full contribution.

4. Simplifies Selection of Investments

When employees are automatically enrolled into a 401k, the process of choosing their retirement plans is simplified. The 401k will generally have a few types of funds to invest in, and it makes the process very simple for employees.