Small Business Retirement Plans in Eureka, MO. Establishing a retirement plan for you and your Eureka, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. However, for most business owners, it can be hard to know how to proceed once they decide to establish one. What type of plan is best for your business? What federal regulations do I have to follow? 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 Eureka, MO financial planners is committed to helping business owners and their employees reap the benefits of their retirement plans and navigate the specifics of their individual plans and benefits. For anything from initial setup and employee education to making annual adjustments, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Eureka, MO?
The federal government and various financial institutions offer different plans and accounts for small business owners and their employees to better prepare for retirement. 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 business with no non-owner employees, or those 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 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 employees as 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 often seen as "start-up" retirement savings plans for smaller businesses that do not yet offer a plan. Employers can contribute 2% of an employee's paycheck, or dollar-to-dollar match an employee's contribution up to 3%.. This is relatively inexpensive for employers as the set-up is fairly inexpensive.
- 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 decides on 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 allows for high contributions and a plan tailored to each individual, you will be subject to startup costs.
- Business 401(k) Plan — 401(k)s can be established 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 employers and employees. Common types of 401(k) plans include:
- 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 only for owner-only businesses, or businesses where the only employee is a spouse. You can contribute up to the annual 401(k) limit each year, and you can contribute a set percentage of your income 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.
There are pros and cons to each plan, and which may be better suited to you will be based on the nature of your business and your employees' needs. Different plans have different tax breaks, expenses, required minimum distributions, maximum contributions, and more. A reputed financial advisor like those 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 Eureka, MO
The particular, financial-based benefits for your Eureka, MO small business retirement plan is dependent upon which plan you set up. However, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. Over half 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. Below are some of the main benefits for both businesses and employees of setting up a small business retirement plan:
- More confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- Contributions and investment gains are not taxed until distributed
- Over the years small contributions grow into significant savings
- Ability to perform a 401(k) rollover if they change employers
- Attract, recruit, and retain your best employees
- Incentivize based on performance-based employer contributions
- Deduct your taxable income from your taxable income
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in Eureka, MO to Help 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, some states require employers of a certain size to have a retirement plan. Eureka, MO retirement consultants that have spent years 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 ever-changing tax and business laws.
As your Eureka, 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 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 implementing a record keeping system
- Help you operate your plan by adapting as we need to to 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 important aspect of their ongoing financial success
Correct Capital's Eureka, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically bound to do what's best for you and your employees. The only product we offer is trust. Request a consultation with a member of our advisor team today.
Other services we offer in Eureka, MO include:
- 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
- Retirement Planning
Small Business Retirement Plans in Eureka, MO | Correct Capital
Operating a small business involves countless daily, monthly, and annual 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* 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 314-930-401K or contact us online.
*as of January 2022