Small Business Retirement Plans in Arnold, MO. Offering a retirement plan to your Arnold, MO employees is a great way to retain talent, boost performance, and get those much-needed tax reductions. However, many business owners understandably have questions about small business retirement plans. What benefits do different kinds of plans provide? What are the different laws that apply to different plans? What do I do when I want to change plans, or if I'm closing my business? Correct Capital's team of Arnold, MO financial planners is dedicated to helping business owners and their employees reap the rewards of their retirement plans and understanding the specifics of their individual plans and benefits. Whether you already have a plan and want insight as to how it's performing or are looking to create an entirely new one, call Correct Capital today at 314-930-4015 or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Arnold, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as when plan participants enjoy tax benefits. Depending on your specific needs, you may open any of the following:
- SEP-IRA — A "Simplified Employee Pension" is a type of individual retirement account that is available to self-employed business owners with no employees, freelancers, and businesses with very few employees. It follows the same rules as a traditional IRA, where the money put into the account grows tax-deferred. You cannot contribute more than 25% of an employee's yearly earnings or $66,000 (as of 2023), whichever is less. Employers can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" is an acronym for "Savings Investment Match Plan for Employees," and these plans are for businesses with up to 100 employees. Employees can fund their own accounts through salary deferrals, and employers can also contribute. This is relatively inexpensive for employers as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is strictly for owner-only businesses, or those with no more than 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are adjusted annually based on that, with a maximum limit set each year. While this plan allows for high contributions and a plan tailored to each individual, you will be subject to annual fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers tax incentives and allows employees to invest savings so the money can benefit them later. Employees may defer their salary as contributions, and employers can make annual contributions. Most 401(k) plans offer significant tax planning benefits for both businesses and workers. They can include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also referred to as a One-Participant 401(k), this plan functions similarly to a business 401(k), but for people who are self-employed, or whose only employee is a spouse. A maximum contribution level is set each year, and the employer may make a nonelective contribution up to 25% of income or, if self-employed, an amount calculated by looking at your earned income and deducting half of self-employment tax paid and contributions made by you over the course of the year. You can choose to open a Roth 401(k) account, or roll over pre-tax assets.
There are pros and cons to each plan, and which may be better suited to you will depend on the nature of your business and your employees' needs. Different retirement have varying tax breaks, expenses, required minimum distributions, limits on how much you can put in each year, and more. A reputed financial advisor like those at Correct Capital will review your options and aid you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Arnold, MO
The particular, financial-based benefits for your Arnold, MO small business retirement plan is dependent upon which plan you choose. That said, a small business retirement plan, whichever one you choose, has universal benefits. 60% of workers responded to a survey saying it is a "very important" factor in how good they feel at their present employment, while employers reap the benefits both during tax season and in office productivity. Below are some of the main benefits for both businesses and employees of establishing a small business retirement plan:
Employee Benefits
- Better financial security in retirement
- Tax deductions
- Contributions are simple with payroll deductions
- They do not pay taxes on money they put in or how the money grew until distributed
- As interest accrues, small savings grow into significant sums of money
- Ability to conduct a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Employer contributions are tax-deductible
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Arnold, MO to Assist With My Small Business Retirement Plan?
Creating small business retirement plans is not the same thing as setting up a personal savings plan at your local Arnold, MO bank. While the federal government does not currently require any business to offer a retirement plan to employees, certain states require employers with a certain number of employees to have a retirement plan. Arnold, MO retirement consultants that have spent years helping business owners set up retirement plans are usually needed to not only make sure you and your employees get the most out of your plan, but that you abide by ever-changing tax and business laws.
As your Arnold, MO retirement plan consultants for your small business, our team will:
- Help you elect which plan works best for you and your employees, and the right custodian to hold plan assets
- Assist you in setting up your plan, including creating a document that complies with IRS code, establishing a trust for plan assets, helping employees understand how specific of the plan apply to their retirement, and developing a record keeping system
- Help you operate your plan by keeping up-to-date with applicable laws, managing the plan's assets, and distributing benefits
- Help educate your employees on your plan, its benefits, and how it can serve as a component to their ongoing financial journey
Correct Capital's Arnold, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically bound to do what's best for you and your employees. The only product we offer is trust. Request a meeting with a member of our advisor team today.
Other services we offer in Arnold, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
- Social Security Consultants Near Me
Small Business Retirement Plans in Arnold, MO | Correct Capital
Owning a small business comes with countless moving parts and tasks to ensure things run smoothly — setting up and maintaining a small business retirement plan doesn't have to be one of them. Correct Capital currently manages over 30 plans for a variety of types of businesses, and represents over $230 million in total plan assets* throughout the country. To set up a retirement plan for your small business, or learn what other services we offer to business owners, speak to a financial advisor at Correct Capital today at 314-930-4015 or contact us online.
*as of January 2022
