Small Business Retirement Plans in Frontenac, MO. Offering a retirement plan to your Frontenac, 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 benefits do different kinds of plans provide? What federal regulations do I have to follow? What happens 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 Frontenac, MO financial planners has over 70 years of combined experience helping business owners and their employees reap the benefits of having a sound retirement plans and understanding the specifics of financial law. For anything from initial setup and employee education to making annual adjustments, call Correct Capital today at 877-930-4015 or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Frontenac, MO?
The federal government and various financial institutions offer different plans and accounts for small business owners and their employees to aid in there retirement planning. 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 self-employed business owners with no employees, people who do freelance work, and businesses with very few employees. It follows the same rules as a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. 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 their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these individual retirement accounts are frequently 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 employees usually make the majority of the contribution, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is only available to business with no non-owner employees, or those with no more than 5 employees. With this plan, an employee targets a desired level of retirement income, and contribution limits are modified annually based on their desired income, age, salary, and tenure with the company. While this plan is highly customizable and allows for significant contributions, you will have to pay startup costs.
- Business 401(k) Plan — 401(k)s can be opened 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 businesses and workers. 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 Owner-Only 401(k), this plan is aimed at offering similar benefits to a business 401(k), but for people who are self-employed, or whose 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 taking into account 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 benefits and drawbacks, and which may be "best" for you will be based on the nature of your business and your employees' needs. Different plans have different tax benefits, costs, required minimum distributions, contribution limits, and more. A prudent financial advisor like our team at Correct Capital will review your options and guide you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Frontenac, MO
The specific, financial-based advantages to your Frontenac, MO small business retirement plan will largely be based on the specific plan you choose. However, a small business retirement plan, whichever one you choose, has universal benefits. Three out of five employees responded to a survey saying 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:
Employee Benefits
- Better financial security in retirement
- Reduced taxable income
- Contributions can be easily made through salary deferral
- They do not pay taxes on contributions or how the money grew until they withdraw them
- Over the years small contributions grow into considerable savings
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain high performers
- 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 Frontenac, MO to Help With My Small Business Retirement Plan?
Setting up small business retirement plans is far different from setting up a personal savings plan at your local Frontenac, MO bank. While the federal government does not currently require any employer to offer a retirement plan to employees, some states require employers with a minimum number of employees to offer access to a retirement plan. Frontenac, MO retirement consultants that are experienced in helping business owners establish retirement plans are usually needed to not only make sure the plan is right for you, but that you abide by frequently chancing tax and business laws.
As your Frontenac, MO retirement plan consultants for your small business, our advisers will:
- Help you elect the best plan for you, and which financial institution should house 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 how specific of the plan apply to their savings, and creating 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 they can use it as a important aspect of their ongoing financial health
Correct Capital's Frontenac, MO financial planners are fiduciary advisors, meaning we are legally and ethically bound 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 Frontenac, 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 Frontenac, MO | Correct Capital
Owning a small business involves a mountain of 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 in both small and large companies, 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 we can do for business owners, call Correct Capital today at 877-930-4015 or contact us through our website.
*as of January 2022
