Small Business Retirement Plans in Crestwood, MO. Establishing a retirement plan for you and your Crestwood, MO employees is a great way to retain talent, boost performance, and get those much-needed tax breaks. While the benefits may be obvious, the difficulties of opening and maintaining small business retirement plans are not. What benefits do different kinds of plans provide? What federal regulations do I have to follow? What do I do when I want to change plans, or if I'm closing my business? Correct Capital's team of Crestwood, 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 understanding the specifics of financial law. Whether you already have a plan and want insight as to how it's performing or need to set up a plan, call Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Crestwood, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. 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, freelancers, 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 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. Employees can fund their own accounts through salary deferrals, and employers can also contribute. This plan is low-cost as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is only available to owner-only businesses, or businesses with up to 5 employees. With this plan, an employee targets a desired level of retirement income, and contribution limits are adjusted each year based on their desired income, age, salary, and tenure with the company. While this plan is highly customizable and allows for significant contributions, you will have to pay startup costs.
- 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 pick a percentage of their compensation to be contributed, and investments are often held in mutual funds. Most 401(k) plans offer considerable tax planning benefits for both businesses and workers. 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 i401(k), this plan is aimed at offering similar benefits to a business 401(k), but only for owner-only businesses, or businesses where the 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 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 advantages and drawbacks, and which may be "best" for you will be based on the nature of your business and your employees' needs. Different accounts have different tax advantages, fees, required minimum distributions, maximum contributions, 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 Crestwood, MO
The specific, financial-based advantages to your Crestwood, 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. Over half of employees responded to a survey stating it 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:
Employee Benefits
- More confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with payroll deductions
- Contributions and investment gains are not taxed until they withdraw them
- As interest accrues, small savings grow into significant savings
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Deduct your taxable income from your taxable income
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Crestwood, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is complicated. While the federal government does not currently require any business to offer retirement savings options to workers, some states require businesses of a certain size to have a retirement plan. Crestwood, MO retirement consultants that are experienced in helping business owners open retirement plans are usually needed to not only ensure you get the benefits you're looking for, but that you abide by frequently chancing tax and business laws.
As your Crestwood, MO retirement plan consultants for your small business, our advisers will:
- Help you elect the best plan for you, and the right custodian to hold plan assets
- Assist you in establishing 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 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 it can serve as a component to their continued financial health
Correct Capital's Crestwood, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by ethics to do what's best for you and your employees. The only thing we sell is trust. Schedule a meeting with a member of our advisor team today.
Other services we offer in Crestwood, 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 Crestwood, MO | Correct Capital
Owning a small business comes with a mountain 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* 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
