What are the options for retirement investment plans for lawyers?The most popular plans include employer-sponsored 401(k) plans, Solo 401(k) plans, SIMPLE IRA, and Simplified Employee Pension (SEP) IRA. There are two commonalities among these types of retirement accounts:
- These are types of accounts, not specific kinds of investments.
- While in the account, money grows tax-free.
Why should small law firms offer a retirement investment plan?If you’re an owner of a small law firm, you’re competing against large firms for top talent. Whether you need another partner, a paralegal or legal assistant, to recruit and retain skilled workers, it’s important to offer a 401(k) plan as a benefit. As reported by CNN Money, law firms offer some of the best retirement investment plans and contribute an average of $11,023 annually to employees’ plans. Other benefits of a 401(k) include these specific tax advantages:
- Employees and business owners can make tax-deferred contributions
- Employers receive tax benefits when making contributions to employee accounts
- Account growth isn’t taxed until withdrawn
How can small law firms manage a 401(k)?Large law firms not only have teams of partners and associates who generate income, but they also employ staff members that handle administrative duties, including dedicated HR support for their lawyers. If you started or joined your small firm recently or are working as a solo practitioner, some aspects of working in a large firm probably didn’t appeal to you. At the same time, managing HR-related tasks may not be at the top of your list either. Rather than attempting to manage the complexity of a 401(k) plan on your own, look for a provider like Human Interest that specializes in helping small businesses make retirement investments a reality for their workforce. With a great provider and an easy-to-use online tool, you can automate 401(k) administration and employees can plan for the future with built-in investment advising.
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