Retirement plan consultants in Lexington, KY. Sponsoring a retirement plan such as 401(k) is a smart move for Lexington, KY companies and business owners looking for a way to stand out. These plans are a vital component in attracting and retaining top talent, providing employees with a sense of security, and fostering a committed workforce. But, for businesses who haven't established a retirement plan before, or for companies looking for a plan upgrade, the wealth of plan options, regulatory compliance, and tax considerations can be overwhelming.
Correct Capital Wealth Management is an independent Lexington, KY financial consultancy firm that specializes in assisting companies establish and maintain unique retirement plans for your unique business and workforce. We love exploring the unique story behind every company we work with and getting to know the entrepreneurial spirit that drives their leaders. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interest. If you're looking for a retirement plan consultant in Lexington, KY to help set up a 401(k) or other plan, reach out to us via 877-930-4015, contact us online, or make an appointment with one of our financial advisors today.
Benefits of Starting a Retirement Plan for Your Lexington, KY Business
To understand what a 401(k) or other retirement plan could do for your Lexington, KY business, it's crucial to consider what a retirement plan means for your employees:
- 2 in 3 U.S. retirees say there's a retirement crisis in the country; four out of ten think they might outlive their retirement savings (Source)
- Nearly half of retirees say their income wasn't sufficient to save for retirement; 55% blame their employer for not doing enough to help them save (Source)
- In a recent study, 62% of respondents said their largest source of income in retirement will be their 401(k) (Source)
- Three-fifths of employees cited their employers' retirement plan as a reason they remain; nearly half said it's an essential reason to join a company; about four in ten ranked it in their three most desired most desired benefits (Source)
- Nearly four out of five employees with access to a plan participate (Source)
- 78% of younger workers that are 401(k) plan participants are looking for customized investment advice for their plan (Source)
- 77% of plan participants are "extremely confident" in their ability to make the right financial decisions with the help of a financial advisor (Source)
Retirement savings is a major concern for most Americans, and Lexington, KY businesses that offer retirement plans provide themselves a significant edge when it comes to attracting and retaining talent. Moreover, there are a multitude of benefits for both employers and employees that retirement plans offer:
Business Benefits
- Tax deductions for matching contributions
- Earnings on plan assets are tax-free
- Variety of plan options and flexibility to adapt a plan to your business
- Tax credits and other benefits from the SECURE ACT 2.0, can lower initial costs
- Higher employee retention lowers the annual cost of turnover
Employee Benefits
- Employee contributions can reduce their taxable income
- No taxation on contributions and earnings until withdrawal
- Easy-to-make contributions through payroll deductions
- Even small, regular contributions can accumulate into significant retirement savings
- Participant assets can be rolled over if they change employers
- Improved financial security in retirement
Types of Retirement Plans Available for Lexington, KY Businesses
If you're thinking about setting up a 401(k) or other plan for your Lexington, KY business, there are a range of plan options that may be right for your business:
- 401(k) Plans — The cornerstone of American retirement plans, 401(k)s enable for diverse investments across stocks, bonds, mutual funds, and ETFs, and permit employees to save and invest a part of their paycheck before taxes are taken out. Employers can choose to match contributions. Safe Harbor 401(k) plans are largely the same, but employer contributions must be fully vested when made. In exchange, safe harbor 401(k)s are not subject to annual nondiscrimination tests.
- 403(b) Plans — Much like 401(k)s, 403(b)s are specifically designed for employees of educational institutions and non-profits.
- Defined Benefit (Pension) Plans — While 401(k)s and other defined contribution plans operate based on employees contributing a certain amount or percentage of their paycheck, defined benefit plans promise a specific monthly withdrawal once an employee reaches retirement. These plans are primarily employer-funded, and the company takes on the investment risk.
- Cash Balance Plans — Cash balance plans are one form of defined benefit plan that accounts for each participant's balance in a hypothetical account, which increases every year through employer contributions and an annual interest rate. This plan offers consistent returns like a traditional pension but with individual accounts similar to a 401(k). It's an appealing option for businesses seeking a middle ground between the certainty of pensions and the adaptability of contribution plans.
- Simplified Employee Pension (SEP) IRAs — SEP plans offer a simple way for small businesses to offer retirement plans. Employers make contributions directly to an IRA established for each employee. SEPs are easy to administer, with minimal paperwork, and contributions are deductible for the business. They're especially well-suited for businesses with fluctuating income, as the contribution amounts can be adjusted annually.
- Savings Incentive Match Plan for Employees (SIMPLE) IRA — SIMPLE IRAs are tailored to small businesses with 100 or fewer employees. These plans are simpler to manage than 401(k)s but allow employees to contribute a part of their earnings to the plan, which employers must match up to a certain percentage. SIMPLE IRAs are an excellent option for small businesses seeking to provide a more traditional retirement plan without the hassle of larger plans.
- Profit-Sharing Plans — Profit-sharing plans are versatile retirement solutions that enable employers to make optional contributions to their employees' retirement funds. Contributions are typically made from company stock, giving employees a direct stake in the company's success. These plans are adaptable in many ways, offering flexibility in how contributions are distributed and calculated among employees.
- Employee Stock Ownership Plans (ESOPs) — ESOPs offer employees with company stock, offering them an ownership interest in the business. ESOPs are not only a retirement benefit but also synchronize financial goals of employees with those of the company's performance, which can boost productivity and job satisfaction. ESOPs can also complement a company's succession planning as ownership shares can be passed to top employees who will eventually take the reins of the business.
How Can Correct Capital Help My Business's Retirement Plan?
Our Lexington, KY retirement plan consultants manage over 30 plans in companies of all sizes, and represent over $230 million in total plan assets across the country. Our expertise and experience enables us to offer a range of services that encompass both the initial set up and ongoing support:
- Plan selection — We'll aid in evaluating different plan options and selecting the most fitting retirement plan for your business, taking into account factors such as company size, financial goals, employee demographics, and tax considerations. The goal is to select a plan that provides the best benefits to your employees while being economical for your business.
- Establishing the plan — A number of steps are required to formally put the retirement plan in place. These include creating a formal written agreement, arranging a trust for trust assets, notifying eligible employees about terms and conditions, and setting up a record-keeping system. Our Lexington, KY retirement plan consultants can carry out and/or assist with each of these steps.
- Plan changes — Maybe you dislike your current plan, or your business has evolved and you need a retirement plan consultant that can help your retirement plan adapt as you grow. Consultants can help you with modifying your plan to accommodate business growth, changes in workforce, or shifts in financial goals. This includes introducing new options, modifying contribution limits, or transitioning to a different type of plan to more closely align with your needs.
- Investment advice — As a Registered Investment Advisor (RIA), we have access to a wide range of analytical tools, resources, and experience to help with the selection of investment options that should be made available within the plan. This includes assessing the performance of different investment funds, determining their risk levels, and providing a diverse range of options to suit the different needs of different employees.
- Plan documentation — Retirement plan consultants help in drafting and maintaining all required plan documentation, ensuring compliance with IRS and Department of Labor regulations. This includes adoption agreements for the plan, plan summaries, and annual notices to participants.
- Plan participant education — Informing participants is key to ensuring that your employees understand the benefits of participating in the retirement plan and how to make educated investment choices. Correct Capital's retirement plan consultants engage in quarterly webinars to plan participants and offer personalized coaching for topics such as retirement planning, investment risk, and how to enhance their retirement savings.
- Help with regulations and audits — The IRS, SEC, ERISA, and other laws and institutions set rigid frameworks for how companies need to stay legally compliant with their retirement plans. Most 401(k) plans are also subject to annual audits. Retirement plan consultants can help ensure your Lexington, KY business stays compliant. Moreover, hiring Correct Capital as your retirement plan consultant helps remove much of the fiduciary duty related to the plan off your shoulders.
Other services we offer in Lexington, KY include:
Lexington, KY Retirement Plan Consultants | Correct Capital
As you contemplate the future of your business and the well-being of your employees, providing a retirement plan should be at the forefront. With our comprehensive suite of services and commitment to acting exclusively in your best interest, we'll help you get your Lexington, KY company and staff from where you are to where you want to go. To start creating a plan that aligns with your distinct business and objectives, reach out to a retirement plan consultant in Lexington, KY today at 877-930-4015 or contact us online.
