Retirement plan consultants in San Jose, CA. Establishing a retirement plan such as 401(k) is a smart move for San Jose, CA 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 sense of security, 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 San Jose, CA financial advisory firm that specializes in helping companies set up and manage customized retirement plans, built around the needs of both your business and workforce. We love exploring the unique story behind each business we work with and getting to know the entrepreneurial spirit that drives their leaders. As fiduciary advisors, our primary objective is to act in your best interest. If you're in search of a retirement plan consultant in San Jose, CA to help create a 401(k) or other plan, give us a call at 877-930-4015, contact us online, or make an appointment with a member of our advisor team today.
Why Establish a Retirement Plan for Your San Jose, CA Business?
To understand what a 401(k) or other retirement plan could do for your San Jose, CA business, it's essential to consider what a retirement plan means for your employees:
- 67% of U.S. retirees say there's a retirement crisis in the country; 40% worry they will live longer than their savings last (Source)
- Nearly half of retirees say their income wasn't sufficient to save for retirement; 55% blame their employer for not providing adequate resources to help them save (Source)
- In a recent study, 62% of respondents said their primary 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; 47% 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)
- More than three-quarters of employees with access to a plan opt-in (Source)
- 78% of Millennial and Gen Z 401(k) plan participants are keen on personalized investment advice for their plan (Source)
- 77% of plan participants are "extremely confident" in their ability to make the right decisions with their finances with the help of a financial advisor (Source)
Saving for our golden years is a significant concern for most Americans, and San Jose, CA businesses that sponsor retirement plans give themselves a competitive advantage when it comes to securing and keeping valuable employees. Beyond that, there are a host of benefits for both employers and employees that retirement plans offer:
Business Benefits
- Employer 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 and other benefits from the SECURE ACT 2.0, help reduce start up costs
- Higher employee retention lowers the annual cost of training new employees
Employee Benefits
- Employees can lower their taxable income
- Contributions and earnings are not taxed until withdrawal
- Easy-to-make contributions through payroll deductions
- Small, regular contributions can grow 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 San Jose, CA Businesses
If you're thinking about setting up a 401(k) or other plan for your San Jose, CA business, there are a multitude of plan options that may be right for your business:
- 401(k) Plans — The bedrock of American retirement plans, 401(k)s allow for diverse investments including 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 essentially the same, but employer contributions must be fully vested immediately. In exchange, safe harbor 401(k)s are not subject to annual nondiscrimination tests.
- 403(b) Plans — Similar 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 are based on employees contributing a certain amount or percentage of their earnings, defined benefit plans offer a predetermined monthly withdrawal once an employee reaches retirement. These plans are primarily employer-funded, and the company assumes the investment risk.
- Cash Balance Plans — Cash balance plans are a type of defined benefit plan that tracks each participant's balance in a hypothetical account, which increases annually through employer contributions and an interest credit rate. This plan offers predictable benefits like a traditional pension but with personalized accounts similar to a defined contribution plan. It's an attractive option for businesses looking for a middle ground between the security of pension plans and the flexibility of contribution plans.
- Simplified Employee Pension (SEP) IRAs — SEP plans offer an uncomplicated way for small businesses to offer retirement plans. Employers make contributions directly to an IRA set up for each employee. SEPs are easy to administer, with minimal red tape, and contributions are deductible for the business. They're particularly well-suited for businesses with variable profits, as the contribution amounts can be modified 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 earnings to the plan, which employers must match up to a certain percentage. SIMPLE IRAs are an excellent option 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 enable employers to make optional contributions to their employees' retirement funds. Contributions are usually made from company stock, giving employees an incentive to contribute to 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 provide employees with company stock, offering them an ownership interest in the business. ESOPs are not only a retirement benefit but also align financial goals of employees with those of the company's performance, potentially boosting productivity and job satisfaction. ESOPs can also complement a company's succession planning as ownership shares can be passed to high performers who will eventually take the reins of the business.
How Can Correct Capital Help My Business's Retirement Plan?
Our San Jose, CA retirement plan consultants manage over 30 plans in companies of all sizes, and represent over $230 million in total plan assets across the United States. Our expertise and experience allows us to offer a range of services that include both the initial set up and ongoing support:
- Plan selection — We'll aid in evaluating different plan options and selecting the most suitable retirement plan for your unique company, bearing in mind factors such as number of employees, financial goals, employee demographics, and tax considerations. The goal is to select a plan that provides the best benefits to your employees while being cost-effective for your business.
- Establishing the plan — Multiple 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 the terms of the plan, and creating a record-keeping system. Our San Jose, CA retirement plan consultants can handle and/or assist with each of these steps.
- Plan changes — Maybe you're unhappy with your current plan, or your business has evolved and you need a retirement plan consultant that can help your retirement plan evolve with you. Consultants can help you with modifying your plan to accommodate business growth, changes in workforce, or shifts in financial goals. This includes adding new features, adjusting contribution limits, or transitioning to a different type of plan to better meet your needs.
- Investment advice — As a Registered Investment Advisor (RIA), we have access to a wide array of analytical tools, resources, and experience to aid in the selection of investment options that should be made available within the plan. This includes examining the performance of different investment funds, evaluating their risk levels, and providing a diverse range of options to meet the varying investment preferences and retirement goals of your employees.
- Plan documentation — Retirement plan consultants assist 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 — Education is paramount to ensuring that your employees understand the benefits of participating in the retirement plan and how to make wise investment choices. Correct Capital's retirement plan consultants offer quarterly webinars to plan participants and offer one-on-one coaching for topics such as retirement planning, investment risk, and how to maximize their retirement savings.
- Help with regulations and audits — The IRS, SEC, ERISA, and other laws and institutions set rigid guidelines for how companies establish and maintain their retirement plans. Most retirement plans are also subject to annual audits. Retirement plan consultants can help ensure your San Jose, CA 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 San Jose, CA include:
San Jose, CA Retirement Plan Consultants | Correct Capital
As you contemplate the future of your business and the welfare of your employees, implementing a retirement plan should be front and center. With our complete range of services and deep commitment to acting exclusively in your best interest, we'll help you get your San Jose, CA business and staff from where you are to where you want to go. To initiate developing a plan that aligns with your individual business and objectives, talk to a retirement plan consultant in San Jose, CA today at 877-930-4015 or contact us online.
