Small Business Retirement Plans in Creve Coeur, MO. Offering a retirement plan to your Creve Coeur, MO employees is a great way to retain talent, incentivize higher performance, and get those much-desired tax reductions. 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 I'll have to follow? What happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Creve Coeur, MO financial planners is dedicated to helping business owners and their employees get the most out of having a sound retirement plans and navigate the complexity of federal regulations. For anything from initial setup and employee education to fine-tuning an existing plan, call Correct Capital today at 877-930-4015 or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Creve Coeur, MO?
The federal government and different financial custodians offer different plans and accounts for small business owners and their employees to better prepare for retirement. 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 owner-only businesses, people who do freelance work, and businesses with very few employees. It functions similarly to a traditional IRA, where the money put into the account grows tax-deferred. The maximum contribution in a given year is 25% of an employee's yearly earnings or $66,000 (as of 2023), whichever is less. Employers can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these individual retirement accounts are commonly thought of 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 plan is low-cost as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is only available to business with no non-owner employees, or businesses 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 their desired income, age, salary, and tenure with the company. 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 available to by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans offer significant tax planning benefits for both businesses and employees. They can include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also referred to as an Owner-Only 401(k), this plan has many of the same rules and benefits as 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 the employer may make a nonelective contribution up to 25% of compensation or, if self-employed, an amount considering 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 accounts have varying tax breaks, costs, required minimum distributions, maximum contributions, 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 Creve Coeur, MO
The particular, financial-based benefits for your Creve Coeur, MO small business retirement plan will largely be based on the specific plan you choose. However, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of 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:
Employee Benefits
- More financial security in retirement
- Tax deductions
- Contributions can be easily made through salary deferral
- They do not pay taxes on contributions or how the money grew until they take them out
- As interest accrues, small savings grow into considerable savings
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain talent
- Promote great work ethic
- Deduct your taxable income from your taxable income
- 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 Creve Coeur, 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 retirement savings options to employees, certain states require businesses of a certain size to have a retirement plan. Creve Coeur, MO retirement consultants that are experienced in helping business owners establish retirement plans are usually needed to not only make sure you get the benefits you're looking for, but that you follow ever-changing tax and business laws.
As your Creve Coeur, MO retirement plan consultants for your small business, our financial planners will:
- Help you elect the best plan for you, and the right custodian to hold plan assets
- Assist you in establishing your plan, including adopting a written plan, arranging a trust for plan assets, helping employees understand the plan's terms, and creating a record keeping system
- Help you operate your plan by staying compliant 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 part of their continued financial journey
Correct Capital's Creve Coeur, MO financial planners are fiduciary advisors, meaning we are obligated, by law and by ethics to only offer advice based on what we believe is 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 Creve Coeur, 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 Creve Coeur, 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 for a variety of types of businesses, and represents over $230 million in total plan assets* nationwide. 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 877-930-4015 or contact us through our website.
*as of January 2022
