How Establishing a Retirement Plan Can Benefit Your Veterinary Hospital
As veterinary hospitals struggle to attract new staff, it’s become increasingly important for them to find ways to gain an advantage over their competitors. One way that a hospital can differentiate itself is by establishing a retirement plan. Some owners may hesitate to implement these plans because they are busy with day-to-day operations, but taking time to create them can pay off greatly. Here are three benefits to consider when evaluating whether to establish a retirement plan at your hospital:
- Increase retirement savings: One of the most obvious benefits of establishing a retirement plan is that it allows both staff members and owners to increase and grow their retirement accounts. There are also some plan options that allow owners to defer a larger amount of funds than the annual individual limitations. Since retirement savings are often overlooked, particularly by younger employees, encouraging these savings can help your staff save for the future.
- Tax savings: Once a veterinary hospital establishes a retirement plan, employer contributions that are made to the plan are allowed to be deducted for tax purposes. This enables the hospital to reduce its tax liability while also rewarding staff members for their work. In addition to the business deductions, retirement plan contributions may also receive the benefit of being tax-deferred or growing tax-free.
- Recruiting and retention: By offering a retirement plan, your hospital could gain a competitive advantage when it comes to recruiting new staff. In today’s market where applicants are difficult to find, you may be able to attract more staff by offering a better benefits package. Staff may also feel more loyalty to stay with the hospital once they are fully vested in the plan.
Before establishing a retirement plan at your hospital, you’ll need to consider some deadlines regarding the implementation. For instance, some options require that the plans be established by Oct. 1 in order to apply to the current tax year. Therefore, it is best for veterinary hospital owners to review their options and identify the plan that would best work for their practice sooner rather than later. If you need help weighing the cost of implementing a retirement plan against the tax benefit, please contact KSM’s veterinary consulting team.
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