Small Business Retirement Plans in Ballwin, MO. Offering a retirement plan to your Ballwin, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. However, for most business owners, it can be difficult to know where to start. What benefits do different kinds of plans provide? What are the different laws that apply to different plans? What do I do when a new plan seems like a better option, or if I'm retiring and my business will no longer be running? Correct Capital's team of Ballwin, MO financial planners has over 70 years of combined experience helping business owners and their employees get the most out of their retirement plans and navigate the specifics of their individual plans and benefits. For anything from initial setup and employee guidance to fine-tuning an existing plan, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Ballwin, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. Depending on the specifics of your business, you may open any of the following:
- SEP-IRA — This kind of individual retirement account is available to business with no non-owner employees, or those with very few employees. It functions similarly to a traditional IRA, where the money put into the account grows tax-deferred. Contributions are limited to 25% of an employee's compensation or $66,000 (as of 2023), whichever is less. Employers are required to contribute an equal percentage of compensation to employees as to their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these individual retirement accounts are frequently thought of as "start-up" retirement savings plans for smaller businesses that do not yet offer a plan. Employers can contribute 2% of an employee's paycheck, or dollar-to-dollar match an employee's contribution up to 3%.. This plan is low-cost as it's mainly funded by employees, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is strictly for owner-only businesses, or employers 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 is highly customizable and allows for significant contributions, you will be subject to annual fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers tax incentives and investment opportunities. There are annual contribution limits. Most 401(k) plans come with considerable tax planning benefits for both companies 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 known as an Owner-Only 401(k), this plan has many of the same rules and benefits as a business 401(k), but businesses made up only of an owner or of spouses. 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 may also decide to open a Roth 401(k) account, or roll over pre-tax assets.
There are pros and cons to each plan, and there's no telling what's "best" for you without knowing your specific situation. Different plans have different tax advantages, fees, required minimum distributions, maximum contributions, and more. A knowledgeable financial advisor like ours here at Correct Capital will review your options and help you in choosing the best retirement plan for your small business.
Benefits of Setting Up a Small Business Retirement Plan in Ballwin, MO
The particular, financial-based benefits for your Ballwin, MO small business retirement plan will largely be based on the specific plan you set up. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of workers say that a retirement plan is a "very important" factor in how good they feel at their present employment, while employers also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
- Improved confidence in their retirement planning
- Reduced taxable income
- Contributions can be easily made through salary deferral
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small contributions grow into considerable savings
- Ability to conduct a 401(k) rollover if they change employers
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Deduct your taxable income from your taxable profits
- Flexible plan options to fit your plan to your needs
- Tax credits upon initial set-up
Why Should I Consult With a Financial Advisor in Ballwin, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is not the same thing as setting up a personal savings plan at your local Ballwin, MO bank. While the federal government does not currently require any company to offer retirement savings options to employees, some states require employers of a certain size to have a retirement plan. Ballwin, MO retirement consultants that have spent years helping business owners create retirement plans are usually needed to not only make sure the plan is right for you, but that you abide by evolving tax and business laws.
As your Ballwin, MO retirement plan consultants for your small business, our team will:
- Help you elect the best plan for you, 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 the plan's terms, and implementing 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 they can use it as a component to their ongoing financial journey
Correct Capital's Ballwin, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically bound to only work in your best interest. The only thing we sell is trust. Schedule a consultation with a member of our advisor team today.
Other services we offer in Ballwin, MO include:
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
- Retirement Planning
- Rollover 401(k)
- Wealth Management
- 401k Companies
Small Business Retirement Plans in Ballwin, MO | Correct Capital
Operating a small business involves a plethora of daily, monthly, and annual 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 we can do for business owners, call Correct Capital today at 314-930-401K or contact us through our website.
*as of January 2022