Small Business Retirement Plans in Country Life Acres, MO. Setting up a retirement plan for you and your Country Life Acres, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain your highest-performing workers. 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 happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Country Life Acres, 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. Whether you already have a plan and want insight as to how it's performing or need to set up a plan, speak to a financial advisor at Correct Capital today at 877-930-4015 or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Country Life Acres, 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. Among the most common small business retirement plans are:
- SEP-IRA — A "Simplified Employee Pension" is a type of individual retirement account that is available to self-employed business owners with no employees, people who do freelance work, 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 the lessor of 25% of an employee's compensation or $66,000 (as of 2023). 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 for businesses with up to 100 employees. Contributions are made through salary deferrals and employer contributions. 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 reserved for owner-only businesses, or employers with up to 5 employees. With this plan, an employee decides on how much they would like to have in retirement, and contribution limits are modified each year 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 are a workplace savings plan that offers tax incentives and allows employees to invest savings so the money can benefit them later. There are annual contribution limits. Most 401(k) plans come with considerable tax planning benefits for both employers 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 an Owner-Only 401(k), this plan is aimed at offering similar benefits to a business 401(k), but for people who are self-employed, or whose only employee is a spouse. You can contribute up to the annual 401(k) limit 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 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 it's impossible to say which is "best" for you without knowing your specific situation. Different retirement have different tax breaks, fees, required minimum distributions, limits on how much you can put in each year, and more. A knowledgeable 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.
Benefits of Setting Up a Small Business Retirement Plan in Country Life Acres, MO
The specific, financial-based benefits for your Country Life Acres, MO small business retirement plan is dependent upon which plan you choose. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of employees 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. Below are some of the main benefits for both businesses and employees of setting up a small business retirement plan:
Employee Benefits
- Improved financial security in retirement
- Reduced taxable income
- Contributions can be easily made through salary deferral
- They do not pay taxes on contributions or investments gains until they withdraw them
- As interest accrues, small savings grow into considerable sums of money
- Ability to perform a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain your best employees
- Incentivize based on performance-based employer contributions
- Employer contributions are tax-deductible
- Highly customized plans are available
- Tax credits upon initial set-up
Why Should I Consult With a Financial Advisor in Country Life Acres, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently obligate any employer to offer a retirement plan to employees, some states require employers of a certain size to have a retirement plan. Country Life Acres, MO retirement consultants that are experienced in helping business owners create 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 Country Life Acres, MO retirement plan consultants for your small business, our team will:
- Help you elect which plan works best for you and your employees, and which financial institution should house the assets
- Assist you in setting up your plan, including creating a document that complies with IRS code, arranging a trust for plan assets, helping employees understand how specific of the plan apply to their retirement, and implementing a record keeping system
- Help you operate your plan by keeping up-to-date 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 important aspect of their continued financial journey
Correct Capital's Country Life Acres, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically bound to only offer advice based on what we believe is in your best interest. The only product we offer is trust. Schedule a consultation with a member of our advisor team today.
Other services we offer in Country Life Acres, 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 Country Life Acres, MO | Correct Capital
Owning a small business involves a plethora of 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 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, call Correct Capital today at 877-930-4015 or contact us online.
*as of January 2022
