How to Leverage the Benefits of Your Retirement Plan

Will the participants in your retirement plan have enough when they retire? Do you know the key factors that will affect their retirement income? Are they happy with your plan?

Having a retirement plan without asking these questions is like flying in the dark without radar, but gauging how well a retirement plan is performing can confuse employers and employees alike.

The stakes are high because seemingly small decisions taken now can have huge ramifications in the future.

Here’s how to design a superior retirement plan you can leverage benefits from in years to come.


Focus on Balances

First, look at the investment balances. There are three factors to consider:

  1. Employee contributions for each pay period
  2. How the account is invested
  3. How much time the employee has before they retire

The larger the contributions for each pay period, the larger the amount you should have at retirement – but investment choices are critical.

More aggressive portfolios typically have higher returns, but they also come with wilder volatility. This is why your time horizon matters. Over longer periods, an aggressive portfolio can achieve larger annualized returns, which translates into larger accounts at retirement.

As you near retirement, your time horizon for recouping any losses caused by volatility is reduced, which is when you may consider prioritizing stability over growth. The more time you have, the more time your account has to grow. That said, how much you contribute, including employer matching programs, can make a big difference.


It Can be a Win-Win

Employers benefit from a properly designed plan, just like their employees do.

When matches and profit-sharing contributions are included in an employer-sponsored retirement plan, the employer can reduce its overall payroll costs due to tax credits and tax deductions, plus it can generate greater
employee satisfaction.

Many employers regularly pay their employees bonuses and share some of the profits as a way of acknowledging the employee’s contribution to the bottom line. What is sometimes not considered is that when you pay these via regular payroll, you must pay employer taxes on that, plus the employee must pay taxes on that money as well.

Keep in mind: If you pay out some or all those bonuses and profit-sharing contributions into the plan, not only do the employees see their accounts super-charged with additional employer contributions on a pre-tax basis, but you can also write off the employer match and profit-sharing contributions with proper plan design. You can even sometimes get tax credits, as well.

How you design your plan and communicate the benefits to employees can also dramatically boost their satisfaction. The employer cuts costs, employees have great benefits and feel greater loyalty to the company, and perform for clients and customers better – a true win-win outcome.



As an employer, providing a properly designed plan can benefit you as much as it can also benefit your employees.

If you’re an employer who is considering offering a retirement plan, or if you already have a plan but would like to review and potentially improve it, we can help.

We help employers design and manage retirement plans that meet the needs of their employees while helping you avoid the most common mistakes that may trigger an audit.

We create winning strategies and solutions for our clients. Click below to set up a consultation or contact us for
more information.
Confidence Wealth Management team





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Confidence Wealth Management LLC (CWM) is an SEC registered investment adviser. Confidence Wealth & Insurance Solutions LLC (CWIS) is licensed under the NV Department of Insurance, license no. 3647322. CWM and CWIS are two separate affiliated companies. All investment advisory services are provided by CWM and all insurance products and services are provided by CWIS. CWIS does not provide any investment advisory services and CWM does not provide insurance services. CWM and CWIS have no affiliation with government, state, or local agencies. Consult with an attorney or CPA for usage of tax or legal concepts. This material may contain information that are close approximation to the totality of information available to us and not necessarily specific within regards to one situation or another. Some opinions and statements are informational. They are not investment advice as they may not be complete in terms of all details needed to affect an action you wish to undertake, investment strategy or plan. Pursuant to IRS Circular 230, the material is not intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. No estimates used are a promise of return. Also, many opinions are summaries and may not reflect all pertinent facts relevant to you. Any information given is to be considered general, and nothing said herein should be used as a basis for investment decision unless you consult with your Confidence Wealth advisor that can understand your unique situation and give you a customized solution with a complete disclosure. Past performance does not indicate future results. As you know, no one can predict the future. Thus, any forecast in this material is intended strictly as a possible future outlook and not a statement of fact as there could be any scenarios that are not in your favor when making a decision. You must examine all adverse and negative implications on any forecast when made. All information is based on the date of the material and may not be valid, may change, and/or may not be true any longer as time passes. Also, the Form ADV Part 2A for CWM contains detailed disclosures regarding our services and fees, along with applicable conflicts and how we address such conflicts. A copy of our Form ADV can be obtained by calling (310) 824-1000.

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