Company 401(k) plans in St. Louis. Current inflation levels and an employee-friendly job market have driven two main concerns to the top of most St. Louis businesses' lists: saving money and attracting and retaining talent. Establishing a 401(k) plan can help you do both. Company 401(k) plans not only serve as robust retirement saving tools, but also underscore a company's commitment to its employees' long-term financial security – all while delivering much needed tax breaks. In this way, company 401(k) plans are an investment in the future – both for the company and its employees.
In an era inundated with financial products, services, and evolving regulations, navigating the retirement planning landscape can be daunting for many St. Louis business owners. Businesses need the wisdom of objective, independent, and unbiased financial advice in order to be at their best. That's where Correct Capital Wealth Management steps in. If you're thinking of establishing a company 401(k) plan for your St. Louis business, or already have one and want to modify it, call Correct Capital today at 314-930-401(k), or contact us online.
The Basics and Benefits of Company 401(k) Plans
A 401(k) plan is a tax-advantaged, defined-contribution retirement account employers offer to their employees. Named after a section of the U.S. Internal Revenue Code, these plans allow employees to save and invest a portion of their paycheck before taxes are deducted (generally). Taxes aren't paid until the money is withdrawn from the account, typically after retirement. For employers, matching contributions in company 401(k) plans are tax deductible.
The significance of a 401(k) plan goes beyond the immediate tax benefits. For employees, it represents a structured and disciplined way to prepare for retirement, often supplemented by employer contributions or matches. For employers, offering a 401(k) demonstrates a commitment to the long-term financial well-being of their staff, acting as a valuable tool for recruitment, retention, and employee satisfaction.
Common Challenges St. Louis Businesses Face With Company 401(k) Plans
A company 401(k) plan can be a great addition to your St. Louis business. However, establishing, managing, and optimizing a 401(k) plan demands careful consideration, clear strategy, and ongoing commitment. Some of the most prevalent challenges businesses encounter include:
Selecting the Right Plan
There are myriad options available for businesses looking for company 401(k) plans. Companies must sift through these to determine which plan best aligns with their financial situation, business goals, and the needs of their employees. Factors such as plan type (e.g., traditional vs. Safe Harbor), investment options, and contribution structures all come into play.
Managing a 401(k) plan isn't a one-time task. From regular documentation to ensuring timely contributions, the administrative responsibilities can be substantial. Companies must stay on top of enrollment periods, distributions, loan provisions, and other intricacies that come with plan management.
Ensuring Compliance with Regulations
401(k) plans are governed by strict regulations, set primarily by the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Service (IRS). Keeping up with these regulations and ensuring consistent compliance is crucial to avoid penalties and maintain the plan's tax-advantaged status.
Educating Employees on Their Benefits and Choices
A 401(k) plan's success doesn't just hinge on its establishment; your employees need to buy in and understand the value it offers them. It's vital to educate employees about the benefits of enrolling, the nature of employer matching, and the implications of their investment choices. An informed employee is more likely to participate actively and make decisions that align with their financial goals.
The best way to allay these common concerns is to partner with a trusted St. Louis financial advisor who can help you understand your options and the requirements and customize a company 401(k) plan that works best for your St. Louis business.
Correct Capital Wealth Management: Your Trusted Partner in Company 401(k) Planning in St. Louis
Your business requires a partner in St. Louis that understands your unique needs, offers clarity in decision-making, and holds your interests at heart. Correct Capital Wealth Management is a trusted provider of custom 401(k) services in St. Louis for many companies. Here’s what sets us apart:
- Fiduciary duty — At Correct Capital, we are bound by a fiduciary duty. We’re legally and ethically bound to act in your best interest. As fiduciary advisors and CERTIFIED FINANCIAL PLANNER™ professionals, we are legally obligated to follow a Code of Ethics and Standards of Conduct, in which we must:
- Act with honesty, integrity, competence, and diligence
- Act in the client's best interests
- Exercise due care
- Avoid or disclose and manage conflicts of interest
- Maintain the confidentiality and protect the privacy of client information
- Act in a manner that reflects positively on the financial planning professions
- Genuine independence — We're not tied down by affiliations with financial products or institutions. Our independent stance ensures that our advice is purely based on what we believe is best for your business, free from external biases or incentives.
- Proven experience in company 401(k) plans — Correct Capital brings a proven history of experience and success helping both local St. Louis and national businesses establish and manage their company 401(k) plans. We currently manage over 30 plans in both small and large companies, and represent over $230 million in total plan assets across the U.S. (*as of January 2022).
How Correct Capital Adds Value to Company 401(k) Plans in St. Louis
Experienced financial advisors understand the nuances of company 401(k) plans in St. Louis and proactively seek avenues to optimize benefits for both the employer and employees. With our dedication to a client-centered approach, we offer unique value to companies looking to establish or enhance their 401(k) plans.
Personalized Plan Selection Based on Your Company’s Specific Needs
Each company has its own unique set of goals, history, employee demographics, and financial situations. At Correct Capital, we recognize this diversity and tailor 401(k) plan options to meet these individual needs. By understanding the intricacies of your business, we're able to craft a retirement plan that optimizes growth potential for all involved.
Streamlined Administration and Ongoing Management
Handling a 401(k) plan can be administratively intensive. We simplify this process for you. We help monitor how your team is keeping up with compliance checks, timely reporting, and more, and offer you our consultory services to ensure the administrative duties that come with a 401(k) plan do not become burdensome. Having an experienced 401(k) provider allows businesses to focus on their core operations, knowing their 401(k) is in good hands.
Employee Education and Engagement Initiatives
A 401(k) plan is only as effective as its participation rate. We actively engage with employees, offering workshops, one-on-one consultations, and digital resources to educate them about their retirement benefits. By demystifying financial concepts and emphasizing the importance of early and consistent contributions, we aim to boost employee participation and confidence in their retirement planning. With Correct Capital, your employees will have their very own St. Louis retirement consultant.
Frequently Asked Questions (FAQs) About Company 401(k) Plans in St. Louis
Navigating the intricacies of 401(k) plans can often lead to questions. In our commitment to transparency and client education, we've compiled a list of frequently asked questions about company 401(k) plans:
- How are company 401(k) plans funded?
Company 401(k) plans are primarily funded through elective salary deferrals made by employees. Additionally, employers can choose to match a portion of the employee's contributions or offer non-elective contributions. Those funds are taken from your company's finances and are tax-deductible.
- What are the benefits of a 401(k) compared to other retirement options?
Company 401(k) plans offer higher contribution limits than many other retirement options such as IRAs, as well potential employer matching, loan provisions, and flexibility in investment choices. Additionally, contributions can be made through either traditional or Roth deferrals, offering greater tax flexibility to your employees.
- How do employer matches work in a 401(k) plan?
Employers can choose to match employee contributions up to a certain percentage of the employee's salary. This match can be dollar for dollar or a different ratio, and the employee's total contribution, including yours and their contributions, cannot exceed a set limit ($66,000 in 2023, with an additional $7,500 for those 50 and older).
- How are 401(k) funds invested?
401(k) funds are typically invested in a variety of options, mostly involving mutual funds, including target-date funds, large-cap and small-cap funds, real estate funds, and bond funds. As a plan fiduciary, Correct Capital can select and monitor the specific investment choices, and employees can customize their portfolios based on their risk tolerance and financial goals.
- What are the fees associated with 401(k) plans?
Fees can vary based on the plan provider, investment choices, or and whether the company wants to pay 401k plan fees. Common fees include administrative and recordkeeping fees, individual service fees, and investment-related fees. Investment fees for passive (index) fund managers can significantly reduce investment cost. Fees typically range from .5% to 2%, and the average fee is approximately 1% of assets managed.
- What are the key responsibilities of an employer offering a company 401(k) plan?
Employers are responsible for selecting and monitoring the plan provider, ensuring compliance with federal regulations, providing timely disclosures to employees, and remitting employee contributions promptly. As your advisors for your company 401(k) plan in St. Louis, Correct Capital can take on much of the fiduciary duty involved off your shoulders.
Call Correct Capital for Your Company 401(k) Plans in St. Louis Today
The right guidance when offering your company 401(k) plan in St. Louis can make all the difference. Correct Capital Wealth Management, rooted in St. Louis, offers fiduciary responsibility and our I.O.U. promise: all the advice we give will be independent, objective, and unbiased. By partnering with Correct Capital, you ensure that your company's retirement benefits are not only compliant and optimized but also tailored to meet the unique needs of your enterprise and its employees. Schedule an appointment with a member of our advisor team, call us at 314-930-401(k), or contact us online to get started with your company 401(k) plans in St. Louis today.