Retirement plan consultants in Lexington, KY. Setting up a retirement plan such as 401(k) is a strategic move for Lexington, KY companies and business owners looking for a way to stand out. These plans are a vital component in retaining and attracting top talent, providing employees with a feeling of stability, and fostering a productive workforce. But, for businesses who haven't established a retirement plan before, or for companies who'd like to make changes to their current plan, the variety of plans available, regulatory compliance, and tax considerations can be overwhelming.
Correct Capital Wealth Management is an independent Lexington, KY financial advisory firm that specializes in assisting companies establish and manage unique retirement plans for your unique business and workforce. We enjoy exploring the unique story behind each business we work with and getting to know the entrepreneurial spirit that motivates their leaders. As fiduciary advisors, we have a legal and ethical obligation to act only in your best interest. If you're in search of a retirement plan consultant in Lexington, KY to help set up a 401(k) or other plan, give us a call at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors today.
Why Establish 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 important to look at what a retirement plan means for your employees:
- 67% of U.S. retirees say there's a retirement crisis in the country; 40% think they might live longer than their savings last (Source)
- 45% of retirees say their income wasn't high enough to save for retirement; 55% blame their employer for not providing adequate resources to help them save (Source)
- In one survey, nearly two-thirds of respondents said their primary source of income in retirement will be their 401(k) (Source)
- 60% of employees cited their employers' retirement plan as a reason they remain; 47% said it's an important reason to join a company; 44% ranked it in their top three most desired benefits (Source)
- More than three-quarters of employees with access to a plan opt-in (Source)
- Nearly eight in ten of younger workers that are 401(k) plan participants are keen on customized investment advice for their plan (Source)
- Three-quarters of plan participants are "extremely confident" in their ability to make sound financial decisions with the help of a financial advisor (Source)
Saving for retirement is a significant concern for most Americans, and Lexington, KY companies that offer retirement plans provide themselves a competitive advantage when it comes to attracting and retaining talent. Additionally, there are a bevy of benefits for both employers and employees that retirement plans offer:
Business Benefits
- Matching contributions are tax-deductible
- Tax-free earnings on assets
- A range of plan choices and the flexibility to adapt a plan to your business
- Tax credits , among other advantages from the SECURE ACT 2.0, help reduce start up costs
- Higher retention rates lower the annual cost of turnover
Employee Benefits
- Employees can lower their taxable income
- Contributions and earnings are not taxed until withdrawal
- Contributions are easy to make through payroll deductions
- Small, regular contributions can grow into significant retirement savings
- Participant assets can be rolled over if they change employers
- Enhanced financial wellbeing in retirement
Types of Retirement Plans Available for Lexington, KY Businesses
If you're thinking about sponsoring a 401(k) or other plan for your Lexington, KY business, there are a variety of plan options our retirement plan consultants are ready to discuss:
- 401(k) Plans — The cornerstone of American retirement plans, 401(k)s allow for a wide range of investments across stocks, bonds, mutual funds, and ETFs, and permit employees to save and invest a part of their income before taxes are deducted. 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 — Comparable to 401(k)s, 403(b)s are tailored for employees of tax-exempt organizations.
- 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 income, defined benefit plans promise a predetermined monthly withdrawal once an employee reaches retirement. These plans are mostly employer-funded, and the company bears the investment risk.
- Cash Balance Plans — Cash balance plans are a type of defined benefit plan that accounts for each participant's balance in a hypothetical account, which grows annually through employer contributions and an annual interest rate. This plan offers predictable benefits like a traditional pension but with individual accounts similar to a 401(k). It's an attractive option for businesses seeking a middle ground between the security of pension plans and the flexibility of contribution plans.
- Simplified Employee Pension (SEP) IRAs — SEP plans offer a straightforward way for small businesses to provide retirement benefits. Employers make contributions directly to an IRA established for each employee. SEPs are easy to administer, with no significant red tape, and contributions are tax-deductible for the business. They're especially well-suited for businesses with variable profits, as the contribution amounts can be adjusted annually.
- Savings Incentive Match Plan for Employees (SIMPLE) IRA — SIMPLE IRAs are designed for small businesses with 100 or fewer employees. These plans are easier to set up and maintain than 401(k)s but allow employees to contribute a part of their income to the plan, which employers are required to match up to a certain percentage. SIMPLE IRAs are a great choice for small businesses looking to offer a more traditional retirement plan without the complexities of larger plans.
- Profit-Sharing Plans — Profit-sharing plans are versatile retirement solutions that allow employers to make discretionary contributions to their employees' retirement funds. Contributions are typically made from company stock, giving employees a direct stake in the company's bottom line. These plans are adaptable in many ways, offering flexibility in how contributions are distributed and calculated among employees.
- Employee Stock Ownership Plans (ESOPs) — ESOPs provide employees with company stock, offering them an ownership interest in the business. ESOPs are not only a retirement benefit but also synchronize employees' interests with the company's performance, which can boost productivity and job satisfaction. ESOPs can also align with a company's succession planning as ownership shares can be passed to high performers who will eventually take the reins of the business.
What Can Correct Capital's Lexington, KY Retirement Plan Consultants Do for My Business?
Our Lexington, KY retirement plan consultants manage over 30 plans in both small and large companies, and oversee over $230 million in total plan assets across the U.S. Our expertise and experience allows us to offer a range of services that encompass both the initial set up and ongoing support:
- Plan selection — We'll assist in evaluating different plan options and selecting the most fitting retirement plan for your business, considering factors such as number of employees, financial goals, employee demographics, and tax considerations. The goal is to choose a plan that offers the best benefits to your employees while also helping out your bottom line.
- Establishing the plan — Multiple steps are required to make the retirement plan legitimate. 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're unsatisfied 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 assist you in 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 possess a wide array of analytical tools, resources, and experience to aid in the selection of investment options that ought to be made available within the plan. This includes analyzing the performance of different investment funds, assessing their risk levels, and ensuring a diverse range of options to meet the varying investment preferences and retirement goals of your employees.
- Plan documentation — Retirement plan consultants help in drafting and maintaining all essential 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.
- Ongoing participant education — Informing participants is key to ensuring that your employees grasp the benefits of participating in the retirement plan and how to make educated investment choices. Correct Capital's retirement plan consultants offer quarterly webinars to plan participants and offer personalized coaching for topics such as retirement planning, investment risk, and how to increase 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 retirement plans are also subject to annual audits. Retirement plan consultants can make sure your Lexington, KY business stays compliant. Moreover, hiring Correct Capital as your retirement plan consultant enables us to assume 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 think about the future prospects of your company and the welfare of your employees, implementing a retirement plan should be at the forefront. With our wide array of services and commitment to acting solely in your optimal interest, we'll help you lead your Lexington, KY business and staff from where you are to where you want to go. To initiate creating a plan that fits with your distinct company and objectives, reach out to a retirement plan consultant in Lexington, KY today at 877-930-4015 or contact us online.
