Tax Reduction & Credit
$16,391

Total Tax Reduction and Credit over the life of the program.

Employer Benefits
$18,517
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Employer benefits to their business and their personal retirement.

Employee Benefits
$106,332

In pooled employee benefits over 10 years using a modest 6% return rate.

Challenge

The company wanted to provide a valuable retirement benefit to help attract and retain employees in a competitive job market, but was concerned about the costs and administrative burden of setting up and maintaining a retirement plan, especially given the part-time nature of much of its workforce.

Solution

The company partnered with NestWorth to identify the optimal retirement plan solution for its unique needs and workforce profile. After analyzing several options, a Simple IRA plan with a 2% employer contribution was determined to provide an attractive benefit to employees while keeping costs manageable for the company.

Results:

  • The Simple IRA plan is projected to be self-sustaining for 8.53 years based on the employer contributions and identified tax credits.
  • The company expects an estimated $2,824 in tax reduction based on a 35% tax rate.
  • An additional $8,067 in employee tax credits were secured, for a total estimated tax reduction and credit of $16,391.
  • Over a 5-year period, the employer is projected to realize $18,517 in benefits through cost savings and tax advantages.
  • Employees are estimated to gain $40,336 in benefits over the first 5 years through a combination of employer contributions, personal contributions, and investment returns.
  • Accounting for average annual returns of 6%, the pooled employee benefits could reach $106,332 over a 10-year period, significantly enhancing their retirement readiness.
  • By partnering with NestWorth, the company was able to implement a retirement plan that provided a valued benefit to employees, many of whom did not have access to a retirement plan before. The plan also provided tax advantages and credits that improved the company's bottom line. The company now has a powerful tool for recruiting, retaining and rewarding its workforce.

NestWorth worked with the company to set up the plan and educate employees on the benefits of participating and saving for retirement. NestWorth also identified tax credits the company qualified for under the recently passed SECURE 2.0 Act to help offset the costs of starting the plan.

Company Profile

A business with 37 employees, many of whom work part-time with an average annual salary of $10,900.

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