Small Business Retirement Plans in Dardenne Prairie, MO. Offering a retirement plan to your Dardenne Prairie, MO employees is a great way to retain talent, incentivize higher performance, and get those much-desired tax reductions. While the benefits may be obvious, the complexities of setting up 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 do I do when a new plan seems like a better option, or if I'm retiring and my business will no longer be running? Correct Capital's team of Dardenne Prairie, MO financial planners is dedicated to helping business owners and their employees get the most out of having a sound retirement plans and understanding the complexity of federal regulations. For anything from initial setup and employee education to fine-tuning an existing plan, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Dardenne Prairie, MO?
The federal government and different financial custodians 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 business with no non-owner employees, or those with very few employees. It follows the same rules as a traditional IRA, where the money put into the account grows tax-deferred. Contributions are limited to the lessor of 25% of an employee's yearly earnings or $66,000 (as of 2023). Employers are required to contribute an equal percentage of compensation 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 plan is low-cost 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 each year based on that, with a maximum limit set each year. While this plan is highly customizable and allows for significant contributions, you will be subject to costs and 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 advantages for both companies and workers. Common types of 401(k) plans include:
- Individual 401(k) — Also called an i401(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. A maximum contribution level is set 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 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 depend on your business and your and your employees' needs. Different accounts have varying tax advantages, expenses, required minimum distributions, limits on how much you can put in each year, and more. An experienced financial advisor like our team at Correct Capital will be able to help you determine which plan works best for you and your team.
Why You Should Set Up a Small Business Retirement Plan in Dardenne Prairie, MO
The particular, financial-based advantages to your Dardenne Prairie, MO small business retirement plan is dependent upon which plan you set up. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. Three out of five workers responded to a survey stating it is a "very important" factor in job satisfaction, while employers reap the benefits both during tax season and in office productivity. Companies and employees will both enjoy:
- More confidence in their retirement planning
- Reduced taxable income
- Contributions can be easily made through salary deferral
- They do not pay taxes on money they put in or how the money grew until distributed
- Over the years small contributions grow into significant sums of money
- Ability to conduct a 401(k) rollover if they change employers
- Attract, recruit, and retain high performers
- Promote great work ethic
- Deduct your taxable income from your taxable income
- Flexible plan options to fit your plan to your needs
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in Dardenne Prairie, MO to Help With My Small Business Retirement Plan?
Opening small business retirement plans is far different from setting up a personal savings plan at your local Dardenne Prairie, MO bank. While the federal government does not currently require any employer to offer retirement savings options to employees, some states require businesses of a certain size to have a retirement plan. Dardenne Prairie, MO retirement consultants that are experienced in helping business owners create retirement plans are usually needed to not only make sure you and your employees get the most out of your plan, but that you abide by frequently chancing tax and business laws.
As your Dardenne Prairie, MO retirement plan consultants for your small business, our advisers will:
- Help you choose the "right" plan for you, and the right custodian to hold plan 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 creating 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 part of their continued financial health
Correct Capital's Dardenne Prairie, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to do what's best for you and your employees. We work for you, and not our own firm. Schedule a meeting with a member of our advisor team today.
Other services we offer in Dardenne Prairie, 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 Dardenne Prairie, MO | Correct Capital
Owning a small business comes with countless 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* across the United States. To set up a retirement plan for your small business, or learn what other services we offer to business owners, call Correct Capital today at 314-930-401K or contact us through our website.
*as of January 2022