Small Business Retirement Plans in Ellisville, MO. Offering a retirement plan to your Ellisville, 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 type of plan is best for your business? What are the different laws that apply to different plans? What do I do when I want to change plans, or if I'm retiring and my business will no longer be running? Correct Capital's team of Ellisville, MO financial planners is committed to helping business owners and their employees get the most out of having a sound 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 are looking to create an entirely new one, call Correct Capital today at 877-930-4015 or contact us through our website.
What Types of Retirement Plans Are Available to Small Businesses in Ellisville, MO?
Uncle Sam and various financial institutions 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 owner-only businesses, 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. The maximum contribution in a given year is 25% of an employee's compensation 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 IRAs are frequently 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 it's mainly funded by employees, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is strictly for business with no non-owner employees, or employers with no more than 5 employees. With this plan, an employee targets a desired level of retirement income, and contribution limits are adjusted annually based on that, with a maximum limit set each year. While this plan allows for high contributions and a plan tailored to each individual, you will have to pay 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. 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 advantages 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 a Solo 401(k), this plan is aimed at offering similar benefits to a business 401(k), but businesses made up only of an owner or of spouses. 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 can choose to open a Roth 401(k) account, or roll over pre-tax assets.
There are pros and cons to each plan, and which may be better suited to you will be based on your business and your and your employees' needs. Different accounts have different tax advantages, costs, required minimum distributions, limits on how much you can put in each year, and more. A knowledgeable 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 Ellisville, MO
The particular, financial-based benefits for your Ellisville, 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. Over half of employees responded to a survey saying it is a "very important" factor in job satisfaction, while employers also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
Employee Benefits
- More financial security in retirement
- Tax deductions
- Contributions can be easily made through salary deferral
- Contributions and investment gains are not taxed until distributed
- As interest accrues, small savings grow into significant savings
- Ability to conduct 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
- Flexible plan options to fit your plan to your needs
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Ellisville, MO to Assist With My Small Business Retirement Plan?
Creating small business retirement plans is complicated. While the federal government does not currently obligate any business to offer a retirement plan to employees, certain states require employers with a certain number of employees to have a retirement plan. Ellisville, MO retirement consultants that are experienced in helping business owners establish 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 Ellisville, MO retirement plan consultants for your small business, our financial planners will:
- Help you choose which plan works best for you and your employees, and which financial institution should hold the assets
- Assist you in setting up your plan, including creating a document that complies with IRS code, 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 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 part of their continued financial health
Correct Capital's Ellisville, MO financial planners are fiduciary advisors, meaning we are legally and ethically bound to do what's best for you and your employees. As an independent firm, we have the freedom and flexibility to tailor our offerings to best suit the goals of our clients. Schedule a consultation with a member of our advisor team today.
Other services we offer in Ellisville, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
Small Business Retirement Plans in Ellisville, MO | Correct Capital
Operating a small business comes with countless daily, monthly, and annual tasks to ensure things run smoothly — navigating the complexities of a small business retirement plan shouldn't 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 other services we offer to business owners, call Correct Capital today at 877-930-4015 or contact us through our website.
*as of January 2022
