Let’s discuss what’s really important to today’s employees.

1.       Money

A competitive salary speaks louder than almost any other aspect of employment. That’s because money is the main reason people work. Sure, some people work to keep themselves busy or for the prestige that goes along with their job (or the health insurance), but most people exchange their blood, sweat and tears for cold, hard cash they use to pay their rent or mortgage and put food on the table.

For this reason, you have to stay abreast of what the standard is in your field and in your area, and what your competitors are paying. If you fall behind, you run the risk of losing your best employees to other companies that pay better — or you may never even get the chance to hire a truly good worker.

If you aren’t located in a big city, this could greatly impact your business’s success and growth. You could become known early on as cheap, and smart workers will avoid you. Pay your employees fairly if you want them to stay, and pay them well if you want them to be happy about staying.

2.       Positive Working Environment

Having a bad boss or a stressful working environment has been consistently ranked as one of the top stressors in life, right up there with divorce, death and serious illness. And no wonder — most of us spend 40 hours a week working, and if you’re subjected to micromanagement, bullying, harassment or worse, those 40 hours could seem like 400. No money is worth that type of stress, and it’s the biggest reason employees quit.

It’s important to treat your employees with respect, but you must ensure that your employees treat each other with respect as well. Not only is it the right thing to do, but failing to protect employees from sexual harassment or harassment due to race, gender, sexual orientation or a host of other qualities and factors can open you up to a lawsuit.

Apply the golden rule with your employees, as you do in life, and treat them as you would want to be treated. Give them autonomy, allow them a good work/life balance and don’t pressure them to produce more than is reasonable.

3.       Paths for Advancement and Growth

Dead-end jobs are so named for a reason — once you get them, you’re stuck. Even before you hire an employee, think about ways their role at your company could expand over time. You don’t necessarily need to reveal these ideas during the job interview, but it’s good to be prepared in case anyone asks. Additionally, once you hire an employee and see them in action, your ideas about how their job could shift might change. They may have ideas of their own as well.

Once you establish good and trusting relationships with your employees, you may even want to invest in their education, helping to pay for them to get additional training, certificates or even another degree.

Employees want to feel valued, and one way to help ensure that happens is to give them added responsibility, along with better compensation, a new title and maybe even their own office.

4.       Benefits

Benefits are critically important to most employees, and almost all full-time employees. Living in a nation where healthcare is far from guaranteed — almost 10% of Americans have none —  most workers depend on their employer for this all-important avenue to staying alive and well.

Vacation days — or paid time off — is also in short supply throughout the U.S., so providing your employees time for rest and relaxation is definitely appreciated.

Also prized: retirement plans. The idea that saving for retirement is a luxury few can afford has become antiquated. A little more than half of U.S. workers have access to a retirement plan like a 401(k) at work. That’s a pretty dismal statistic, when you consider that so much of retirement income goes to supplemental health insurance and prescription meds. A major roadblock has been the time and expense associated with sponsoring a 401(k) plan for employees, making it all but unaffordable for small-business owners.

That’s where 401GO comes in. We work with small-business owners, helping them to set up a 401(k) in minutes instead of weeks or months, and the fees are nominal. If you think this sounds too good to be true, you can read about us in U.S. News & World Report. We’re here to help you help your employees (and yourself) save for retirement. Browse our site today and see how easy it is.

The post How to Retain the Best Employees appeared first on Fast and Affordable 401k for growing businesses.

Thus, your approach to engagement with clients — whether they are individuals or sponsors of a small-business 401(k) plan — must be sound, or you will never get the chance to demonstrate your superior skills. Effective client engagement encompasses understanding your clients’ unique needs, fostering trust and delivering exceptional service. 

In this article, we will explore the art of client engagement and discuss strategies that can help you grow your practice.

Develop a Client-Centric Approach

As a professional who deals with the public, your focus is on your clients and their 401(k) retirement plans. You may even have a template or form for them to fill out before your first meeting so that you have a better understanding of their goals, financial aspirations and concerns going into the initial conversation. That’s a sound start. But how can you improve the process?

One useful tool for financial advisors trying to differentiate themselves in a crowded field is the ability to anticipate clients’ wants, needs and concerns. A good grasp of anticipatory knowledge can be key in landing more clients. However, you must take care not to overdevelop your confidence in this area so that you believe you know what the client wants before they even ask. 

Many potential clients may be unfamiliar with 401(k) providers and 401(k) setups for small businesses, but it’s important to resist the urge to hijack the conversation by giving what may start to sound like a canned speech.

Build Trust and Credibility

Trust forms the foundation of any successful client-advisor relationship. Establishing credibility through transparent communication, ethical practices and a track record of delivering results is paramount. By demonstrating expertise, maintaining confidentiality and acting in your clients’ best interests, you can build trust and foster long-term relationships.

When you work with 401GO, the nation’s leading 401(k) company for retirement plans for small businesses, you automatically get a boost of credibility, as we are known across the U.S. for our stellar reputation in the arena. Working with an efficient, trusted 401(k) provider like us means you don’t have to spend time finding the right match for each of your clients — you’ll know who to turn to for help. The time you save translates into a bigger bottom line, a better standing in your field, more success and more satisfied customers.

Effective Communication

A fear many clients will have is that they will not be able to understand what they need to know to create a sound financial plan for their future. While some clients may be happy to turn this worry over to you and forget it, for many others, the unknown brings about anxiety.

Thus, when dealing with clients, it is essential to communicate clearly, using language they can understand, free of jargon or technical terms.

As important as using language clients can understand is having a system that ensures you keep in contact with them on a schedule. Regular and proactive communication about their 401(k) retirement plan, through various channels such as face-to-face meetings, phone calls, emails or newsletters, helps keep clients and small-business owners informed about their financial progress, market updates and changes in their portfolio.

Providing Exceptional Service

Too often in the service industries, clients find it difficult to get their service professional on the phone. Their lawyer, accountant or financial advisor may return phone calls late or sporadically. They make take a hurried attitude during meetings or they may seem to not be paying as close attention as clients would like.

Promptly addressing client inquiries or concerns, offering personalized recommendations and providing a seamless client experience can leave a lasting impression when it comes to managing a retirement plan for small businesses. By being responsive, you can build loyalty and establish yourself as the preferred financial advisor in your geographic area.

Provide Empathy and Emotional Intelligence

Financial decisions regarding 401(k) retirement plans often carry emotional weight for clients. Empathy and emotional intelligence are essential qualities that can help you navigate sensitive discussions, understand clients’ fears and provide reassurance. Showing empathy and being supportive during challenging times can strengthen client relationships and foster a sense of partnership with individual investors and small-business owners.

Continuing Education and Professional Development

Staying updated with industry trends, new financial products and regulatory changes is crucial for building client trust. Continuing education and professional development enable you not just to offer relevant and innovative solutions with respect to small-business 401(k) plans, but also to step in and save the day before it’s too late.

By investing in your own knowledge and expertise, you demonstrate a commitment to providing the best possible advice and service to your clients. As you earn certificates or complete coursework, don’t be shy — let clients know, either by adding the information to your website, posting on social media or including it in your regular communication vehicles.

Asking for Feedback and Demonstrating Value

Regularly seeking feedback from your clients demonstrates your commitment to continuous improvement in managing 401(k) plans for small businesses. Constructive feedback helps identify areas where you can enhance your services and address any concerns promptly. Additionally, demonstrating the value you bring to your clients’ financial lives, such as achieving specific financial milestones or optimizing their investment returns, reinforces the importance of your role as a financial advisor.

There are many methods of getting the client feedback you want. You can have surveys sent out via email, you can ask clients to post reviews either on your site or on a third-party site, or you can ask them directly during meetings and check-ins whether they are happy with your services and can offer any tips for improvement.

Parlaying New Skills into Greater Success

Building strong relationships as a financial advisor for clients investing in 401(k) retirement plans requires mastery of a combination of important skills. By adopting the strategies we have outlined and continuing to evolve while you hone your skills, you can ultimately build a thriving practice, with us as your trusted partner. Remember, strong relationships are built over time, nurtured through consistent communication and sustained by making a commitment to exceptional service and client satisfaction.

The post The Art of Client Engagement: Building Strong Relationships as a Financial Advisor appeared first on Fast and Affordable 401k for growing businesses.

Tip 1: Encourage long-term perspective

It’s common for investors to be adversely focused on short-term gains and losses. Remind your clients that investing is a long-term game and that short-term market fluctuations are a normal part of the process. By staying focused on their long-term goals, clients can avoid making impulsive decisions that could negatively impact their portfolio.

Even when major setbacks are considered, such as the Great Depression, investors who bought in the S&P 500 and hold for 20 years would have gained. While this is no guarantee of future returns, it does suggest that the safe route to growth is a long-term strategy.

Tip 2: Revisit the investment plan

During times of market volatility, it can be helpful to revisit your client’s investment plan. Review the portfolio allocation and make sure that it is aligned with your client’s long-term goals, risk tolerance, and time horizon. It may be necessary to rebalance the portfolio periodically to ensure that it is diversified and appropriately positioned for the current market conditions.

Tip 3: Communicate regularly

Regular communication with your clients is essential during times of market volatility. Regular updates can help your clients feel more confident in their financial decisions and keep them engaged in the process. Reach out to your clients proactively to provide updates on market conditions and reassure them that their portfolio is being actively managed. Encourage your clients to ask questions and express any concerns that they may have.

Practice active listening. Allow clients to share their thoughts and feelings about their financial situation, and show that you are genuinely interested in helping them meet their goals.

Tip 4: Avoid emotional decision making

During times of market volatility, it is important to avoid emotional decision-making. Encourage your clients to remain disciplined and avoid making impulsive decisions based on fear or anxiety. Remind them of the importance of sticking to their investment plan and the potential negative consequences of deviating from it.

Tip 5: Use dollar-cost averaging

One of the most powerful tools to compound growth is dollar-cost averaging. This strategy involves investing a fixed amount of money at regular intervals, regardless of market conditions. This can be a useful strategy for clients who are concerned about market volatility. By investing regularly, clients can take advantage of market dips and avoid buying in at the top of the market.

We know that market volatility is a normal part of investing, and it is important for financial advisors to help their clients navigate it successfully. By encouraging a long-term perspective, revisiting the investment plan, communicating regularly, avoiding emotional decision-making, and using dollar-cost averaging, financial advisors can help their clients stay focused on their long-term goals and avoid making impulsive decisions during times of market volatility.

Your partner for life

No matter what state the market is in, 401GO is your partner through all of it. Our partner portal provides financial advisors insights into their clients accounts, and includes a proposal generator, a fund lineup builder, and a passel of reports.

If you haven’t partnered with 401GO yet, it’s time to look into it. Book a demo call and let’s discover whether a partnership is right for you.

The post Navigating Market Volatility: 5 Tips for Financial Advisors appeared first on Fast and Affordable 401k for growing businesses.

Having a good grasp on what the choices are helps put investors in a better financial position, and it makes them feel more confident about investing. Two popular options for small-business owners and self-employed individuals are the SEP IRA and the solo 401(k), both of which offer a number of benefits and tax advantages. In this article, we’ll take a look at the differences between these two retirement plans and help you evaluate which may be better for you.

What Is a SEP IRA?

A SEP (Simplified Employee Pension) IRA is an Individual Retirement Account that allows self-employed individuals and small business owners to save for retirement. Close to 50 million people in the U.S. are either self-employed or own small businesses, so the availability of SEP IRAs as an investment vehicle to help save money and build wealth for retirement is critically important.

Contributions to a SEP IRA are tax-deductible and earnings are tax-deferred until withdrawn, making it a great choice for those looking to reduce their current tax liability. Choosing a tax-deferred investment strategy means you avoid paying taxes on your earnings for the time being, keeping more money in your pocket now and allowing your investments to grow without restrictions. Additionally, tax deferment can benefit workers who are more likely to find themselves in a higher tax bracket during their working years than during their retirement years.

The most attractive benefit of a SEP IRA is arguably that the contribution limits are much higher than for a traditional IRA, with the maximum contribution for 2023 being 25% of compensation or $66,000, whichever is greater. 

While many Americans are unable to contribute such large amounts to their 401(k) accounts, those who can and wish to may want to look at opening a SEP IRA. Some who choose to participate in this plan have had a sudden and significant bump in income, while others are simply looking to contribute more as they begin the race toward retirement in earnest.

If you have recently inherited money or you have increased your income through marriage or another means, giving you the ability to save and invest more, the results can make a real difference in the size of your nest egg.

What Is a Solo 401(k)?

Another option for self-employed individuals is the solo 401(k). This type of retirement plan is similar to a traditional 401(k), but designed specifically for self-employed individuals and small business owners — a demographic that would otherwise be shut out of the retirement investment game if it were not for the availability of such investment vehicles.

A solo-k provides the same benefits of choosing a tax-deferred investment vehicle as the SEP IRA does. And although the contribution limits are technically the same — $66,000 in 2023 — depending on how you make your contributions, you may be able to make them faster with a solo-k and thus earn more on your investments.

That’s because with a solo-k, you can make contributions as an employee in lump sums until you reach the limit, rather than as a percentage of your income each pay period (as with a SEP IRA). Additionally, once you reach the employee maximum in a solo-k, you can switch to making contributions as an employer, increasing your savings and reducing your business taxes in one fell swoop. 

If you’re over age 50 and you want to contribute the maximum, a solo-k also provides for the opportunity to contribute a catch-up sum ($7,500 for 2023). A SEP IRA provides no such opportunity, because it is 100% employer funded — employees cannot contribute.

Other Important Considerations

Additionally, if you opt for a SEP as a small-business owner, you must contribute equally to all your employees, including yourself — you cannot contribute more to your own account than to your employees’ accounts. So if you are not prepared to fund your employees’ accounts at the same level as your own — or you think you may hire new employees whose accounts will need funding — this can impact your personal savings. It may be affordable to pay yourself 5%, but if you have to pay everyone the same percentage, you may be able to afford only 2% or 3%, and that means you could fall short of saving the maximum during that year 

However, if you’re a small-business owner, you can’t use a solo-k if you want to make contributions to your employees (unless it’s your spouse) — you would need a SEP in that instance.

Another factor that you may want to weigh when making your decision is that with a solo-k, you can choose between making pre-tax or after-tax contributions; a SEP IRA only gives you the pre-tax option.

Which Is Better? 

The best plan for you depends on your individual situation. Both the SEP IRA and the solo 401(k) offer great tax benefits, so it’s important to consider both options before making a decision. 

With 401GO, there is no paperwork required to open a solo 401(k) account and it takes only a matter of minutes for you to open your account and start contributing.

Disclaimer: Investments hold risk of loss, consult your financial advisor before making a decision on which account is best suited for you. 

The post SEP IRA vs. Solo 401(k): Which Is Better for You? appeared first on Fast and Affordable 401k for growing businesses.

Let’s explore some key strategies for maximizing tax efficiency in retirement planning.

Know Your Client’s Tax Bracket

The first step to maximizing tax efficiency is to understand your client’s current tax bracket and how it is likely to change in retirement. This will help you develop a tax-efficient withdrawal strategy that takes advantage of the lower tax brackets and minimizes the impact of required minimum distributions (RMDs) and Social Security benefits.

Utilize Tax-Deferred Retirement Accounts

Tax-deferred retirement accounts such as traditional IRAs and 401(k)s are a powerful tool for maximizing tax efficiency. Contributions to these accounts can be made pre-tax, which reduces your client’s taxable income for the year. Additionally, investment earnings within the account grow tax-free until withdrawals are made in retirement, at which point they are taxed at your client’s ordinary income tax rate.

Consider Roth IRA Conversions

For clients who expect to be in a higher tax bracket in retirement, a Roth IRA conversion may be a smart strategy. This involves converting funds from a traditional IRA or 401(k) into a Roth IRA, which is funded with after-tax dollars. While this will result in an immediate tax liability, withdrawals from a Roth IRA in retirement are tax-free, which can result in significant tax savings over the long term. Most advisors prefer to apply this strategy toward year end. 

Plan for RMDs

Once your client reaches the age of RMD, they will be required to take distributions from their tax-deferred retirement accounts. These withdrawals are taxed as ordinary income, and the amount of the RMD increases each year. 

To minimize the impact of RMDs on your client’s tax liability, it may be beneficial to start making withdrawals before age 72 or to strategically time withdrawals to take advantage of lower tax brackets.

Use Tax-Efficient Investments

Finally, it is important to select tax-efficient investments for your client’s portfolio. This can include municipal bonds, which are exempt from federal taxes, and index funds, which have lower turnover and therefore generate fewer capital gains. By selecting tax-efficient investments, you can help your clients maximize their after-tax returns and minimize their tax liability.

Maximizing tax efficiency is an important part of retirement planning. By understanding your client’s tax situation, utilizing tax-deferred retirement accounts, considering Roth IRA conversions, planning for RMDs, and using tax-efficient investments, you can help your clients minimize their tax liability and preserve more of their savings for their retirement years.

Disclaimer: This is not financial advice. Seek advice from a tax professional when looking at tax-efficient investment implications for your clients. 

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