Small Business Retirement Plans in Brentwood, MO. Establishing a retirement plan for you and your Brentwood, MO employees is a great way to retain talent, boost performance, and get those much-desired tax reductions. However, for most business owners, it can be hard to know how to proceed once they decide to establish one. 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 Brentwood, MO financial planners is dedicated to helping business owners and their employees get the most out of their retirement plans and navigate 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 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Brentwood, MO?
The federal government and various financial institutions offer different plans and accounts for small business owners and their employees to aid in there retirement planning. 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 contributions are tax-deductible, and distributions are taxed as income. 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 plans are for businesses with up to 100 employees. Contributions are made through salary deferrals and employer contributions. This is relatively inexpensive for employers as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is strictly for business with no non-owner employees, or businesses with up to 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are modified 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, there may be annual fees.
- Business 401(k) Plan — 401(k)s can be opened by private companies of any size, and are highly customizable. Employees pick a percentage of their compensation to be contributed, and investments are often held in mutual funds. Most 401(k) plans come with considerable tax planning benefits for both businesses and workers. Common types of 401(k) plans include:
- Individual 401(k) — Also called an Owner-Only 401(k), this plan functions similarly to a business 401(k), but only for owner-only businesses, or businesses where the only employee is a spouse. You can contribute up to the annual 401(k) limit each year, and the employer may make a nonelective contribution up to 25% of income or, if self-employed, an amount taking into account 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.
Each plan has its own benefits and drawbacks, and there's no telling what's "best" for you without knowing your specific situation. Different retirement have different tax benefits, costs, required minimum distributions, contribution limits, and more. A reputed financial advisor like our team at Correct Capital will review your options and help you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Brentwood, MO
The specific, financial-based advantages to your Brentwood, MO small business retirement plan will largely be based on the specific plan you set up. However, there are many general benefits of setting up a small business retirement plan for both businesses and workers. Over half of employees say that a retirement plan is a "very important" factor in job satisfaction, while employers also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
- More confidence in their retirement planning
- Tax deductions
- 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 it's beneficial down the road
- Attract, recruit, and retain your best employees
- Incentivize based on performance-based employer contributions
- Deduct your taxable income from your taxable profits
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Brentwood, MO to Assist With My Small Business Retirement Plan?
Creating small business retirement plans is complicated. While the federal government does not currently require any employer to offer a retirement plan to workers, some states require employers with a minimum number of employees to have a retirement plan. Brentwood, MO retirement consultants that are experienced in helping business owners set up retirement plans are usually needed to not only make sure the plan is right for you, but that you follow frequently chancing tax and business laws.
As your Brentwood, MO retirement plan consultants for your small business, our advisers will:
- Help you decide the "right" plan for you, and which financial institution should house the assets
- Assist you in establishing your plan, including adopting a written plan, 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 adapting as we need to to 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 important aspect of their continued financial journey
Correct Capital's Brentwood, 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. As an independent firm, we have the freedom and flexibility to tailor our offerings to best suit the goals of our clients. Schedule a consultation with a member of our advisor team today.
Other services we offer in Brentwood, 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
- Retirement Calculator
Small Business Retirement Plans in Brentwood, MO | Correct Capital
Operating a small business comes with a mountain of moving parts and tasks to ensure things run smoothly — navigating the complexities of a small business retirement plan shouldn't be one of them. Correct Capital currently manages over 30 plans in both small and large companies, 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, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us through our website.
*as of January 2022