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Don't have a 401(k) plan? Why now may be the best time to offer one

Learn how the SECURE 2.0 Act can make it easier for your business to offer a 401(k) plan and attract top talent.

By Betterment Editors

Published Mar. 26, 2026 |

Don't have a 401(k) plan? Why now may be the best time to offer one Nov 3, 2023 1:43:47 PM Learn how the SECURE 2.0 Act can make it easier for your business to offer a 401(k) plan and attract top talent. A 401(k) plan. For many, that’s a boring topic. But for business owners and leaders—especially if you don’t offer one—a modern 401(k) plan could be your secret to building a strong, loyal workforce. Let’s dive in to see how a 401(k) could help you overcome hiring and retention challenges, and learn why now might be the time to start offering one. Retaining top talent requires more than a competitive salary Seventy-six percent of employees we spoke to in our 2025 Retirement Readiness Report said financial benefits are more important to them now than they were a year ago. What's more, 57% say better financial benefits beyond salary—such as 401(k) matching, student loan support, and financial advising—would entice them to leave their current job. People are leaving their jobs for various reasons, but benefits are increasingly a deciding factor: Younger employees are leading that charge: 65% of Gen Z and 64% of Millennials say they'd switch jobs for a better benefits package. Employees with significant financial anxiety are even more motivated to move: 69% say better benefits would entice them to leave. The struggle to attract and retain top talent is real — but you have an opportunity. The SECURE 2.0 Act reduces—or eliminates—your cost to offer a 401(k) The SECURE 2.0 Act is packed full of 90-plus provisions. We've highlighted a few key provisions that make it easier to offer a 401(k) that benefits you and your employees. Some could reduce (or even pay for) your plan's implementation costs. Others help you capture the long-term employee retention benefit that a 401(k) provides. Small employers can claim up to $15,000 in tax credits in the first three years Quick facts: Startup tax credit: Plan sponsors with 100 or fewer employees can claim up to $5,000 per year to offset the costs of starting a new plan — potentially covering your full implementation cost in the early years. Employer contribution credit: If your plan includes employer contributions, you may be able to claim those costs as a tax credit for up to five years after launching your plan. Automatic enrollment credit: Employers with 100 or fewer eligible employees who add automatic enrollment to a new plan can claim an additional tax credit for up to three years. Your opportunity: A tax credit reduces the amount of taxes you may owe. For smaller employers with lower plan costs, the tax credit may actually cover all 401(k) plan implementation costs in the first three years. Regardless, the SECURE 2.0 Act has made implementing a 401(k) more affordable for many businesses. Employers can offer a 401(k) match on qualified student loan repayments Qualified student loan repayments could count as elective deferrals and qualify for 401(k) matching contributions from their employer. Employees who take advantage of this would be compliance tested separately. Your opportunity: If you have employees with student loans, often early in their careers, offering to match their loan payments with 401(k) contributions can help them jump-start saving for retirement. This becomes an attractive benefit that can help retain talent. Required automatic enrollment and escalation Auto-enrollment: As of January 1, 2025, plans established after December 29, 2022 are required to automatically enroll new employees at a default contribution rate between 3% and 10%. Learn more Auto-escalation: Enrolled employees' contributions automatically increase by 1% each year, up to a minimum of 10% (and no more than 15%). Exemptions: Small businesses with 10 or fewer employees and businesses newer than three years old are exempt from these requirements. Opt-out: Employees are always in control. They can adjust their contribution rate or opt out at any time, and have 90 days from their first contribution to request a withdrawal if they were automatically enrolled. Your opportunity: Higher participation from day one. A recent study from the Center for Retirement Research found that when companies switch from opt-in to automatic enrollment, participation rates can jump from 37% to 86%. Your solution: A modern 401(k) platform Because of the SECURE 2.0 Act, now may be the best time for many businesses to start offering a 401(k). But simply offering a 401(k) isn’t enough. You’ll want to do your research to make sure your plan has the features and technology to make your life, and your employees’ lives, easier.

illustration of magnet represented as building

A 401(k) plan. For many, that’s a boring topic. But for business owners and leaders—especially if you don’t offer one—a modern 401(k) plan could be your secret to building a strong, loyal workforce.

Let’s dive in to see how a 401(k) could help you overcome hiring and retention challenges, and learn why now might be the time to start offering one.

Retaining top talent requires more than a competitive salary

Seventy-six percent of employees we spoke to in our 2025 Retirement Readiness Report said financial benefits are more important to them now than they were a year ago. What's more, 57% say better financial benefits beyond salary—such as 401(k) matching, student loan support, and financial advising—would entice them to leave their current job.

People are leaving their jobs for various reasons, but benefits are increasingly a deciding factor:

Younger employees are leading that charge: 65% of Gen Z and 64% of Millennials say they'd switch jobs for a better benefits package.
Employees with significant financial anxiety are even more motivated to move: 69% say better benefits would entice them to leave.

The struggle to attract and retain top talent is real — but you have an opportunity.

The SECURE 2.0 Act reduces—or eliminates—your cost to offer a 401(k)

The SECURE 2.0 Act is packed full of 90-plus provisions. We've highlighted a few key provisions that make it easier to offer a 401(k) that benefits you and your employees. Some could reduce (or even pay for) your plan's implementation costs. Others help you capture the long-term employee retention benefit that a 401(k) provides.

Small employers can claim up to $15,000 in tax credits in the first three years

Quick facts:

Startup tax credit: Plan sponsors with 100 or fewer employees can claim up to $5,000 per year to offset the costs of starting a new plan — potentially covering your full implementation cost in the early years.

Employer contribution credit: If your plan includes employer contributions, you may be able to claim those costs as a tax credit for up to five years after launching your plan.

Automatic enrollment credit: Employers with 100 or fewer eligible employees who add automatic enrollment to a new plan can claim an additional tax credit for up to three years.

Your opportunity: A tax credit reduces the amount of taxes you may owe. For smaller employers with lower plan costs, the tax credit may actually cover all 401(k) plan implementation costs in the first three years. Regardless, the SECURE 2.0 Act has made implementing a 401(k) more affordable for many businesses.

Employers can offer a 401(k) match on qualified student loan repayments

Qualified student loan repayments could count as elective deferrals and qualify for 401(k) matching contributions from their employer. Employees who take advantage of this would be compliance tested separately.

Your opportunity: If you have employees with student loans, often early in their careers, offering to match their loan payments with 401(k) contributions can help them jump-start saving for retirement. This becomes an attractive benefit that can help retain talent.

Required automatic enrollment and escalation

Auto-enrollment: As of January 1, 2025, plans established after December 29, 2022 are required to automatically enroll new employees at a default contribution rate between 3% and 10%. Learn more
Auto-escalation: Enrolled employees' contributions automatically increase by 1% each year, up to a minimum of 10% (and no more than 15%).
Exemptions: Small businesses with 10 or fewer employees and businesses newer than three years old are exempt from these requirements.
Opt-out: Employees are always in control. They can adjust their contribution rate or opt out at any time, and have 90 days from their first contribution to request a withdrawal if they were automatically enrolled.

Your opportunity: Higher participation from day one. A recent study from the Center for Retirement Research found that when companies switch from opt-in to automatic enrollment, participation rates can jump from 37% to 86%.

Your solution: A modern 401(k) platform

Because of the SECURE 2.0 Act, now may be the best time for many businesses to start offering a 401(k). But simply offering a 401(k) isn’t enough. You’ll want to do your research to make sure your plan has the features and technology to make your life, and your employees’ lives, easier.

Ready to get started—or simply get more of your questions answered? Reach out today.