CNBC: “Employers can use this retirement perk as a ‘stepping stone’ to a 401(k), says advisor”

CNBC, March 10, 2023 Marguerita Cheng, CFP® Pro, is featured in today’s article by Greg Iacurci who explains, “Small business owners today may feel they’re getting pulled in two directions: stuck between wanting to offer a retirement benefit to their workers but feeling unable to afford costs associated with a 401(k) plan.”

But entrepreneurs scared by the affordability of maintaining a 401(k) plan can instead consider an alternative workplace retirement plan known as a SIMPLE IRA, said Marguerita Cheng, a certified financial planner based in Gaithersburg, Maryland.

“The plans — formally known as a Savings Incentive Match Plan for Employees — don’t carry the startup and operating costs of a ‘conventional’ retirement plan, according to the IRS. Employers are more pressured these days to offer a retirement benefit to stay competitive in a hot labor market, Cheng said. Job openings have been historically high, and turnover has been elevated.

“If you have a younger workforce or you have no [retirement] plan, it’s a great way to start offering one,” said Cheng, CEO at Blue Ocean Global Wealth and a member of CNBC’s Advisor Council. SIMPLE IRAs are also “a great stepping stone” to a 401(k) in the future, if an employer wants to make their offering more “robust.”

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