401(k) For Small Business in Fenton, MO

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401(k) for small business in Fenton, MO. Initiating a 401(k) plan for your small business in Fenton, MO provides various benefits to both you and the people that work for you, helping businesses offer more security and benefits to prospective employees. Beyond just offering more benefits than competitors, providing a 401(k) plan can also help both businesses and employees lower their tax liability. But, some business owners may still be wary because of the time involved in establishing and operating a plan, as well as the intricate web of regulations, laws, and investment options available.

At Correct Capital Wealth Management, our Fenton, MO financial planners and retirement consultants help companies of all sizes offer customized and successful 401(k) plans. We do most of the work for you while you focus on making your business flourish. Call Correct Capital today at 877-930-4015 or contact us online to get started with setting up a 401(k) for your small business in Fenton, MO.

Should I Establish a 401(k) For My Fenton, MO Small Business?

Setting up and maintaining a 401(k) for a small business in Fenton, MO has numerous benefits, for you, your employees, and your business goals alike:

  • Attract and retain great employees — Providing a 401(k) plan is an important asset for attracting and retaining top talent, especially in a competitive Fenton, MO job market. One survey says 401(k) plans are the most important financial benefit to employees, and offering one can help your business stand out, especially if they are offered to people beyond management.
  • Tax deductions — Both employers and employees can reduce their tax liability with a 401(k) plan. Matching contributions from employers are tax deductible to the extent that the contributions do not exceed the yearly corporate tax deduction limit on employer contributions, which is 25% of covered payroll. There are also several tax credits when employers first establish a 401(k) plan, and if the employer offers automatic enrollment. Employees enjoy tax-deferred contributions and potentially reduce their taxable income.
  • Increased financial security for employees — A retirement account allows employees to feel more confident about how they'll spend their golden years. Greater financial security eventually leads to more productivity.
  • Decreased liability — Employers owe a fiduciary duty to their employees when they provide 401(k) plans, which involves a a deep level of investment savvy and obligations. If you work with an ERISA 3(38) Fiduciary advisor to assist you with your small business's 401(k), much of that fiduciary duty will be placed on them.
  • Simple administration — When you parter with a 3(16) administrator to establish your small business 401(k) plan, they'll take care of the lion's share of employee education, compliance, and administrative responsibilities for you, so you can reap the rewards of offering a plan without much hassle. Furthermore, advisors can help integrate contributions with your payroll system for further simplicity. If an employee moves to a new company, they can effortlessly rollover their 401(k) to a new retirement account without much hassle to you.

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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.

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Types of 401(k) Plans That Can Help Your Small Business in Fenton, MO

Small businesses, depending on what type of company they are, can have anywhere from one to 1,500 employees. 401(k) plans are available to all businesses, regardless of how many employees they have:


401(k) Plans

In any 401(k) plan, employees can contribute through money taken out of their paychecks. Most 401(k)s have many different investments that may include mutual funds, index funds, bonds, and company stock. Employers can employers can deposit an equal amount as their employees as an added perk to employees. Most 401(k) plans must abide by strict nondiscrimination requirements, and undergo annual tests to ensure they remain compliant. The IRS sets contribution limits each year; in 2023 the limit is $22,500, unless you turn 50 or older this year, in which case you can contribute an additional $7,500 as a catch-up contribution.

Fenton, MO employers with multiple employees have a few different options in how they set up their 401(k) plan:

  • Traditional vs. Roth 401(k) Deferrals — The key difference between traditional and Roth deferrals is when your employees pay taxes on their contributions. With a traditional deferral, contributions are tax-deferred, meaning it is pre-tax money, and the employee can then deduct the amount contributed from their taxable income. Taxes are paid when the money is withdrawn.

    With Roth deferrals, contributions are made with after-tax dollars, meaning the money grows tax-free and there are no taxes when the money's withdrawn, as long as the plan participant has been contributing for at least five years and is 59-½ years old when the withdrawal is made. Roth 401(k)s are becoming increasingly popular as they allow plan participants to diversify their tax exposure in retirement.

  • Safe Harbor Provision — If you decide to set up a Safe Harbor 401(k), as an employer you would be required to make fully vested contributions to your employees' plans. To meet Safe Harbor requirements, you have four possible ways to contribute:
    1. In a non-elective contribution, an employer must contribute 3% of each eligible employee's compensation to the plan, regardless of whether the employee chooses to contribute to the plan.
    2. With matching contributions, the employer must match 100% of each eligible employee's contributions up to 3% of their compensation, plus an additional 50% match on the next 2% of their compensation.
    3. Enhanced Safe Harbor plans provide a 100% employer match on up to 4% of an employee's compensation.
    4. In a Qualified Automatic Contribution Arrangement (QACA), employees are automatically enrolled in the plan and have a percentage of their pay contributed to the plan unless they decide not to. The default contribution rate starts at 3% and increases by 1% every year until it maxes out at 6%, unless the employee elects a different contribution rate.

    Because you are required to make contributions, your company would not be subject to nondiscrimination testing.

Solo or Individual 401(k) Plan

Solo and Individual 401(k) plans are are meant for owner-only businesses, or businesses where the only employees are spouses. Contributions are tax deductible and gains grow tax-deferred until the money is taken out. This allows participants to save more as they can make contributions both as a worker and a businesses owner. Unlike other 401(k) plans, individual 401(k)s do not require annual filings with the IRS unless the account balance is more than $250,000.

What plan works best for your and your employees depends on your business and employees. If you're thinking of establishing a 401(k) plan for your small Fenton, MO business, schedule an appointment with a member of our advisor team today to find out more about the benefits and options available to you.



How a Financial Advisor Can Help Your Fenton, MO Small Business With Your 401(k) Plans

Even considering the benefits of a small business offering a 401(k) plan, some Fenton, MO employers may still be cautious, as managing a 401(k) plan is complex and time-consuming. That’s where we come in. Here are some ways that a financial advisor can help make your life easier in regards to your small business's 401(k) plan:

  • Plan design — A few detailed Google searches are a poor replacement for decades of experience and working on retirement plans every day. Financial advisors can work with small business owners to develop a 401(k) plan meant expressly to benefit them. They can help choose the plan that works best for you, set up contribution and matching formulas, and establish eligibility requirements.
  • Initiating and managing a plan — There are numerous requirements you must adhere to when initiating your small business 401(k). You must:
    • Adopt a written plan document
    • Arrange a trust fund for plan assets
    • Establish a record keeping system
    • Provide plan information to participant

    A financial advisory firm can assist with all of the above requirements, and manage the operation and annual reviews of your 401(k).

  • Marketing your 401(k) plan to prospective employees — The word "401(k)" might appear on a job listing in a list of benefits, but many in the job market don't fully understand what a 401(k) entails. We can bridge the words "401(k)" to definite images of a more secure retirement, with very clear stepping stones on how to get there.
  • Investment selection — Financial advisors who are an Accredited Investment Fiduciary® (AIF®) and are experienced with portfolio management will be able to provide investment insight, as well as work within investment principles such as diversification, risk tolerance, and rebalancing to optimally position employees' savings for further growth.
  • Employee education — The more an employee understands their 401(k) plan, the more it will benefit them. At Correct Capital, we offer both group classes and one-on-one counseling sessions with our small business clients' employees so they're confident with how their money is being held and invested.
  • Compliance — Employers must abide by various rules and contribution limits when offering a 401(k) plan. Not following the rules correctly can lead to stiff penalties. A financial advisor can help to ensure your recordkeeper and plan administrator do not inadvertently break with the regulations.
  • Fiduciary duty — When offering a retirement plan, small business owners have a fiduciary duty to act in the best interest of plan participants. We are ethically and legally mandated to do what's in your best interest, and in the best interest of your employees and their retirement accounts.

A financial advisor can provide significant value to Fenton, MO small business owners who are looking to set up a 401(k) plan. By partnering with a financial advisor, small business owners can provide a valuable benefit to their employees while also managing risk and ensuring the plan’s long-term success.

401(k) For Small Business Fenton, MO | Retirement Planners | 401(k) Services Near Fenton

Call Correct Capital to Establish a 401(k) For Your Small Business in Fenton, MO

If you own a small business in Fenton, MO, you want to spend your time on what you do best and what you're passionate about – not being bogged down by administrative tasks you may not have the time, knowledge, or interest to manage. As a Registered Investment Advisor with CERTIFIED FINANCIAL PLANNER® professionals, Correct Capital can both help position your and your employees' money for growth while giving you peace of mind that your small business's 401(k) plan is being operated efficiently and correctly. To start setting up a 401(k) for your small Fenton, MO business today, call Correct Capital at 877-930-4015 or contact us online.


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