Small Business Retirement Plans in Des Peres, MO. Offering a retirement plan to your Des Peres, MO employees is a great way to retain talent, boost performance, and get those much-desired tax breaks. However, many business owners understandably have questions about small business retirement plans. What type of plan is best for your business? What federal regulations do I have to follow? What happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Des Peres, MO financial planners has over 70 years of combined experience helping business owners and their employees reap the rewards of their retirement plans and understanding the complexity of financial law. For anything from initial setup and employee education to making annual adjustments, call Correct Capital today at 314-930-4015 or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Des Peres, MO?
Uncle Sam and various financial institutions offer different plans and accounts for small business owners and their employees to better prepare for retirement. Depending on the specifics of your business, you may open any of the following:
- SEP-IRA — This kind of individual retirement account is available to business with no non-owner employees, or those with very few employees. It functions similarly to a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. The maximum contribution in a given year is 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" stands for "Savings Investment Match Plan for Employees," and these IRAs are for businesses with up to 100 employees. 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 reserved for owner-only businesses, or those with up to 5 employees. With this plan, you target 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 is highly customizable and allows for significant contributions, there may be annual fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers employees tax breaks for contributions 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 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 known as an i401(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. A maximum contribution level is set each year, and you can contribute a set percentage of your income or, if self-employed, an amount calculated by looking at 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.
Each plan has its own advantages and drawbacks, and which may be "best" for you will be based on your business and your and your employees' needs. Different retirement have different tax benefits, expenses, required minimum distributions, limits on how much you can put in each year, and more. A reputed financial advisor like ours here 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 Des Peres, MO
The specific, financial-based benefits for your Des Peres, MO small business retirement plan will largely be based on the specific 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 say that a retirement plan is a "very important" factor in job satisfaction, 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 confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- They do not pay taxes on contributions or investments gains until distributed
- Over the years small contributions grow into significant sums of money
- Ability to perform 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
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Why Should I Consult With a Financial Advisor in Des Peres, 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 company to offer retirement savings options to workers, some states require businesses of a certain size to have a retirement plan. Des Peres, MO retirement consultants that have spent years helping business owners set up retirement plans are usually needed to not only make sure you get the benefits you're looking for, but that you abide by ever-changing tax and business laws.
As your Des Peres, MO retirement plan consultants for your small business, our team will:
- Help you choose the best plan for you, and which financial institution should house the 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 savings, and implementing a record keeping system
- Help you operate your plan by adapting as we need to to relevant laws, managing the plan's assets, and distributing benefits
- Help educate your employees on your plan, its benefits, and how they can use it as a component to their ongoing financial journey
Correct Capital's Des Peres, MO financial planners are fiduciary advisors, meaning we are obligated, by law and by regulatory oversight to do what's best for you and your employees. The only product we offer is trust. Schedule a meeting with a member of our advisor team today.
Other services we offer in Des Peres, 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 Des Peres, MO | Correct Capital
Owning a small business involves a mountain of moving parts and 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 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 we can do for business owners, call Correct Capital today at 314-930-4015 or contact us online.
*as of January 2022
