Small Business Retirement Plans in Fenton, MO. Setting up a retirement plan for you and your Fenton, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain your highest-performing workers. While the benefits may be clear, the complexities of opening 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 I want to change plans, or if I'm retiring and my business will no longer be running? Correct Capital's team of Fenton, 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 complexity of federal regulations. For anything from initial setup and employee education to making annual adjustments, speak to a financial advisor at Correct Capital today at 877-930-4015 or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Fenton, MO?
Uncle Sam 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 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. 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 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 for businesses with up to 100 employees. 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 owner-only businesses, or those with up to 5 employees. With this plan, an employee decides on how much they would like to have in retirement, and contribution limits are modified 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 opened by private companies of any size, and are highly customizable. Employees may defer their salary as contributions, and employers can make annual contributions. Most 401(k) plans come with significant tax planning advantages for both companies 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. A maximum contribution level is set each year, and you can contribute a set percentage of your 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 plans 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 review your options and help you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Fenton, MO
The particular, financial-based advantages to your Fenton, MO small business retirement plan is dependent upon which plan you choose. However, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. Over half of employees responded to a survey stating 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 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 considerable savings
- Ability to perform 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 that can help reduce startup costs
Do I Need a Financial Advisor in Fenton, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is not the same thing as setting up a personal savings plan at your local Fenton, MO bank. While the federal government does not currently obligate any company to offer retirement savings options to workers, certain states require employers with a certain number of employees to offer access to a retirement plan. Fenton, MO retirement consultants that have spent years helping business owners establish retirement plans are usually needed to not only ensure you and your employees get the most out of your plan, but that you abide by evolving tax and business laws.
As your Fenton, MO retirement plan consultants for your small business, our advisers will:
- Help you elect the best plan for you, and the right custodian to hold plan assets
- Assist you in setting up your plan, including adopting a written plan, establishing a trust for plan assets, helping employees understand how specific of the plan apply to their savings, and developing 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 component to their continued financial health
Correct Capital's Fenton, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by regulatory oversight to only work in your best interest. We work for you, and not our own firm. Request a meeting with a member of our advisor team today.
Other services we offer in Fenton, 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 Fenton, MO | Correct Capital
Operating a small business involves countless daily, monthly, and annual 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* 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 877-930-4015 or contact us online.
*as of January 2022
