401(k) For Small Business in Manchester, MO

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401(k) for small business in Manchester, MO. Initiating a 401(k) plan for your small business in Manchester, MO provides various benefits to both you and the people that work for you, helping businesses stand out and provide a more secure to their employees. In addition to offering more benefits than competitors, providing a 401(k) plan can also help both businesses and employees reduce their tax liability. However, some business owners might not be confident they want to move forward because of the time commitment, as well as the complexities of investment and financial regulations.

At Correct Capital Wealth Management, our Manchester, MO financial advisors and retirement consultants help companies of all sizes offer 401(k) plans that fit what their business needs and what their employees want. We take the heavy financial lifting off your plate, so you can focus on growing your business while we focus on growing your and your employees' retirement accounts. Speak to a Correct Capital team member today at 877-930-4015 or contact us online to get started with setting up a 401(k) for your small business in Manchester, MO.

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

Establishing and operating a 401(k) for a small business in Manchester, MO has numerous benefits, for you, your workers, and your business goals alike:

  • recruit and retain great talent — Providing retirement plans is a valuable asset for recruiting and keeping top talent, particularly if many Manchester, MO companies are advertising for the same position. Some employees will even quit their job over a 401(k), and offering one can help your business stand out, especially if they are offered to people beyond the highest earners.
  • Tax deductions — Both employers and employees can benefit from tax advantages with a 401(k) plan. Matching contributions from employers are tax deductible to the extent that the contributions do not surpass the annual corporate tax deduction limit on employer contributions, which is 25% of covered payroll. The federal government also offers tax credits when companies 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 a more productive workforce.
  • Reduced liability — Employers assume a fiduciary duty to their employees when they offer 401(k) plans, which involves a wide range of investment comprehension and obligations. If you partner with an ERISA 3(38) Fiduciary advisor to assist you with your small business's 401(k), the majority of that fiduciary duty will go to them.
  • Simple administration — When you offer your small business 401(k) plan with a 3(16) administrator, they'll manage the critical tasks of employee education, compliance, and administrative tasks for you, so you can reap the rewards of offering a plan without much nuisance. In addition, advisors can help with 401(k) payroll integration for further simplicity. If an employee moves to a new company, they can effortlessly perform a 401(k) rollover 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 Manchester, MO

Small businesses, depending on what type of company they are, can have anywhere from one to 1,500 employees. However many employees you have, there is a 401(k) plan that will work for you:


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 additional benefit to employees. Most 401(k) plans must abide by stringent nondiscrimination requirements, and perform yearly tests to ensure the plan doesn't discriminate in favor of highly compensated employees. 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 the limit is $30,000.

Manchester, MO companies with multiple employees have a few different considerations to make when setting 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 the contributions are made before taxes are taken out, lowering an employee's 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 the savings and any gains can be withdrawn tax-free, so 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 reduce tax liability in retirement.

  • Safe Harbor Provision — If you opt for this provision, as a business owner you would be obligated to make fully vested contributions to your employees' accounts. There are four ways in which an employer can contribute:
    1. In a non-elective contribution, an employer must contribute 3% of each eligible employee's compensation to the plan, whether or not the employee decides to themselves.
    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 money is taken out of their paycheck unless they choose to opt out or contribute a different amount. The automatic contribution rate starts at 3% and increases by 1% each year until it reaches a maximum of 6%, unless the employee elects a different contribution rate.

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

Solo or Individual 401(k) Plan

Solo and Individual 401(k) plans are are meant for people who are self-employed, or businesses where the only employees are spouses. Contributions can be deducted from taxable income and the money is taxed when it's withdrawn. This allows participants to save more as they can make contributions both as a worker and an employer. Unlike other 401(k) plans, individual 401(k)s do not require annual filings with the IRS unless the account balance surpasses $250,000.

What plan works best for your and your employees depends on your business and your and your employees' needs. If you're thinking of setting up a 401(k) plan for your small Manchester, MO business, schedule a meeting with a member of our team today to get started.



How a Financial Advisor Can Help Small Manchester, MO Businesses With Their 401(k) Plans

Given the great things a 401(k) plan can do for a small business, some Manchester, MO employers might still be uneasy, as managing a 401(k) plan is complex and time-consuming. That’s where we come in. Here are some ways that our advisory firm can assist with your small business’s 401(k) plan:

  • Plan design — A handful of detailed Google searches are a poor replacement for decades of experience and everyday interaction with retirement plans. Financial advisors can partner with small business owners to create a 401(k) plan meant specifically to benefit them. They can help choose the plan that most benefits you, set up contribution and matching formulas, and establish eligibility requirements.
  • Initiating and operating a plan — There are numerous requirements you must adhere to when beginning your small business 401(k). You have to:
    • Adopt a written plan document
    • Arrange a trust fund for plan assets
    • Develop a record keeping system
    • Provide plan information to eligible employees

    A financial advisory firm can do all of that for you, and manage the operation and annual reviews of the plan.

  • Marketing your 401(k) plan to those in the job market — The phrase "401(k)" might appear on a job listing as a bullet point, but many in the job market don't know the full benefits a plan provides. We can connect 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 well versed in portfolio management will be able to provide market insight, as well as work within investment concepts such as diversification, risk tolerance, and rebalancing to best 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 can speak directly to your small business's employees so feel at ease with the status of their retirement savings.
  • Compliance — Employers must adhere to certain regulations when offering a 401(k) plan. Not following the rules correctly can lead to harsh penalties. A financial advisor can help to ensure all of the proper rules are followed.
  • Fiduciary duty — As a plan sponsor, small business owners have a fiduciary duty to act with diligence, prudence, and care. We are morally and legally required to do what's in your best interest, and in the best interest of your employees and their funds.

A financial advisor can provide remarkable value to Manchester, MO small business owners who want to experience the benefits of a 401(k) plan. By working 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 Manchester, MO | Retirement Planners | 401(k) Services Near Manchester

Call Correct Capital to Set Up a 401(k) For Your Small Business in Manchester, MO

If you own a small business in Manchester, MO, you want to focus on why you started your business – not being bogged down by retirement plan responsibilities you may or may not be knowledgeable about. 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 Manchester, MO business today, call Correct Capital at 877-930-4015 or contact us online.


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