Small Business Retirement Plans in Cottleville, MO. Offering a retirement plan to your Cottleville, MO employees is a great way to retain talent, boost performance, and get those much-needed tax breaks. While the benefits may be clear, the complexities of opening and maintaining small business retirement plans are not. What benefits do different kinds of plans provide? What are the different laws that apply to different plans? What happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Cottleville, MO financial planners is committed to helping business owners and their employees reap the benefits of having a sound retirement plans and understanding the complexity of federal regulations. Whether you already have a plan and want insight as to how it's performing or are looking to create an entirely new one, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Cottleville, 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 — This kind of individual retirement account is available to self-employed business owners with no employees, people who do freelance work, and businesses with very few employees. It functions similarly to a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. You cannot contribute more than 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" is an acronym for "Savings Investment Match Plan for Employees," and these IRAs are commonly seen as "start-up" retirement savings plans for smaller businesses that do not yet offer a plan. Employees can fund their own accounts through salary deferrals, and employers can also contribute. This is relatively inexpensive for employers as it's mainly funded by employees, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is only available to business with no non-owner employees, or those with up to 5 employees. With this plan, an employee decides on 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, there may be costs and fees.
- Business 401(k) Plan — 401(k)s can be opened by private companies of any size, and are highly customizable. Employees may defer their salary as contributions, and employers can make annual contributions. Most 401(k) plans come with considerable tax planning advantages for both businesses and employees. Common types of 401(k) plans include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also called a One-Participant 401(k), this plan functions similarly to a business 401(k), but businesses made up only of an owner or of spouses. A maximum contribution level is set each year, and you can contribute a set percentage of your compensation 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.
There are pros and cons to each plan, and there's no telling what's "best" for you without knowing your specific situation. Different accounts have varying tax breaks, costs, required minimum distributions, limits on how much you can put in each year, and more. A reputed financial advisor like our team at Correct Capital will be able to help you determine which plan works best for you and your team.
Benefits of Setting Up a Small Business Retirement Plan in Cottleville, MO
The specific, financial-based advantages to your Cottleville, MO small business retirement plan will largely be based on the specific plan you set up. However, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. Three out of five 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. Companies and employees will both enjoy:
- More financial security in retirement
- Tax deductions
- Contributions can be easily made through salary deferral
- They do not pay taxes on contributions or investments gains until they take them out
- Over the years small savings grow into considerable sums of money
- Ability to perform a 401(k) rollover if it's beneficial down the road
- Attract, recruit, and retain talent
- Promote great work ethic
- Deduct your taxable income from your taxable profits
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in Cottleville, MO to Help With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently obligate any company to offer retirement savings options to employees, some states require businesses of a certain size to offer access to a retirement plan. Cottleville, MO retirement consultants that have spent years helping business owners open retirement plans are usually needed to not only make sure you get the benefits you're looking for, but that you abide by evolving tax and business laws.
As your Cottleville, MO retirement plan consultants for your small business, our financial planners will:
- Help you decide the "right" 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 staying compliant with relevant 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 success
Correct Capital's Cottleville, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by ethics 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 Cottleville, 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 Cottleville, MO | Correct Capital
Owning a small business comes with a plethora of daily, monthly, and annual tasks to ensure things run smoothly — navigating the complexities of a small business retirement plan doesn't have to 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* across the United States. 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 314-930-401K or contact us online.
*as of January 2022