Many small business owners still believe that offering a 401(k) is too complicated or costly. In reality, running a business already comes with enough challenges—managing payroll, supporting your team, and staying competitive—so it is understandable why retirement plans may feel overwhelming. But recent updates under SECURE 2.0 have completely changed the landscape, making 401(k)s more accessible, flexible, and affordable than ever.

If you have hesitated in the past, now is a great time to rethink what you know about these plans and what they can offer your business.

Growing Adoption Among Small Businesses

Today, fewer than one in four small businesses offer a 401(k), but that number is rising quickly as owners realize how much easier these plans are to set up and manage.

Tax Credits That Reduce Startup Costs

Businesses with up to 100 employees may qualify for tax credits of up to $5,000 per year for the first three years to help cover plan startup costs. There is also an additional credit of up to $1,000 per employee for employer contributions.

Clear Eligibility Rules for Employees

Employees generally need to have earned at least $5,000 in the prior year to participate. This helps ensure the plan is accessible while still meeting regulatory standards.

Auto-Enrollment Boosts Participation

Most new plans now include auto-enrollment, a feature that significantly increases participation rates and helps employees build long-term financial security.

Benefits for Hiring and Retention

A well-structured 401(k) can help your business stand out when attracting and retaining top talent. Additionally, both plan expenses and employer contributions are tax-deductible, lowering your taxable income.

More Flexible and Affordable Options

With new plan designs, modern technology, and expanded incentives, offering a 401(k) is no longer the administrative or financial burden it once was.

Now is an ideal time to explore your options so you can remain competitive and support your team’s financial future. Speak with a financial or benefits advisor to design a plan that fits your business’s needs.