More than half of American workers currently feel they are behind on their retirement savings, with approximately 21% having not started saving at all. For many, the hurdle isn’t a lack of desire to save, but a lack of access to an employer-sponsored plan. While 95% of companies with over 500 employees offer retirement plans, that number drops significantly to just 48% for businesses with fewer than 50 employees.

The Colorado State Mandate: A Call to Action

The Colorado SecureSavings program is now in effect, requiring employers with five or more employees who have been in business for at least two years to offer a qualified retirement plan. While the state provides an auto-enroll Roth IRA program, many businesses may find that a traditional 401(k) offers greater flexibility and higher contribution limits for their teams.

Compliance is critical. Employers who fail to provide a qualified plan may face fines of $100 per employee, per year, up to a maximum of $5,000 annually.

Maximizing Benefits with SECURE Act 2.0

The SECURE Act 2.0 has removed many of the financial barriers that previously deterred small and medium-sized businesses (SMBs) from starting a plan. Key incentives include:

• Startup Tax Credits: Eligible employers with up to 50 employees can now claim a tax credit for 100% of plan startup costs, capped at $5,000 annually for the first three years.
• Employer Contribution Credits: A new tax credit is available based on a percentage of employer contributions made to employees.
• Automatic Enrollment Credit: An additional $500 annual credit is available for three years for employers who implement automatic enrollment.

In a practical scenario, a company with 30 employees could potentially see upwards of $101,000 in total tax credits over a five-year period by leveraging these incentives.

High Contribution Limits for 2026

For the 2026 tax year, 401(k) plans allow for significantly higher savings compared to other vehicles:

• Employee Deferral: Up to $24,500.
• Catch-up (Ages 50+): An additional $8,000.
• Total Limit: Up to $72,000 per person when combining employee and employer contributions ($80,000 for those over 50).

Reducing the Administrative Burden

A common misconception is that 401(k)s are too difficult to manage. However, modern payroll integrations have largely automated the manual work. Systems can now automatically detect new eligible employees, process contributions directly from paychecks, and sync employee details to ensure compliance.

By moving beyond the "one-size-fits-all" approach of state-mandated IRAs, Colorado CPAs can help their clients implement robust retirement solutions that attract top talent, provide significant tax advantages, and help ensure their employees are on the right path to a secure retirement.

As accounting professionals, you are the first line of defense for clients navigating a rapidly shifting landscape. Between the SECURE Act 2.0 incentives and the enforcement of the Colorado SecureSavings mandate, the barrier to entry for retirement plans has collapsed. By partnering with the nation's fastest-growing modern 401(k) and 403(b) provider, Human Interest (a COCPA Preferred Partner), you can now offer clients retirement solutions that are more accessible, affordable, and automated than ever before.

Phil Kennedy is a Partner Account Manager and Colorado’s Human Interest representative. He can be reached at Phil.Kennedy@humaninterest.com or 720-334-6661.