In the 2024 DentalPost Salary Survey, 63% of dentists and 49% of dental hygienists did NOT have retirement plan (like a 401k plan) offered to them at work. There has NEVER been a better time to start a 401k plan and, if you have a 401k plan, benchmarking your plan.
Why is it such a good time to start a 401k plan? The recent legislation, SECURE Act 2.0, allows employers to offset their 401k startup costs by up to $5,000 via tax credits AND offset their on-going 401k costs for the first 5 years of the plan. Be sure to click the link for more details on the SECURE Act 2.0 and take a look at our recent video about being ready to start a 401k plan. Reach out to us so we can help you with these great opportunities!
Let’s review some of the 401k plan benefits….
First, the benefits to the employees (including the owners):
- In 2024, eligible employees can defer up to $23,000 of their income annually, which can reduce their current taxable income, or future taxes if choosing the Roth 401k option. If you are age 50 or older, you can add an additional $7,500 to your annual deferral.
- Safe Harbor contribution of 3% for eligible employees, providing a matching contribution that saves even more for retirement. (this is a MUST for a great 401k plan)
- Can add an annual profit-sharing contribution depending on the practice’s success.
- Create a retirement nest egg
The benefits to employers:
- Attract and retain staff
- Potential to save significantly on taxes
- A 401k plan is the 2nd or 3rd most offered benefit to the dental staff. Make sure you have one AND you review it annually.
Overall, implementing a 401k retirement plan can be a win-win situation for both employers and employees. And now with tax credits, it makes the choice easy!
If you’re interested in learning more about how a 401k plan could benefit your company and employees, reach out and let’s chat!
Already have a 401k plan? We offer complimentary benchmarking and a review of your 401k.
