Small Business Retirement Plans in Glendale, MO. Starting up a retirement plan for you and your Glendale, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. While the benefits may be clear, the difficulties of setting up and maintaining small business retirement plans are not. What type of plan is best for your business? 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 Glendale, MO financial planners is committed to helping business owners and their employees get the most out of their 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 314-930-401K or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Glendale, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as when plan participants enjoy tax benefits. 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 self-employed business owners with no employees, freelancers, 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 25% of an employee's yearly earnings 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" is an acronym for "Savings Investment Match Plan for Employees," and these individual retirement accounts 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 only available to business with no non-owner employees, or businesses with no more than 5 employees. With this plan, you target how much they would like to have in retirement, and contribution limits are adjusted annually based on their desired income, age, salary, and tenure with the company. 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 considerable tax planning benefits for both businesses and employees. Common types of 401(k) plans include:
- Individual 401(k) — Also referred to as an i401(k), this plan has many of the same rules and benefits as a business 401(k), but businesses made up only of an owner or of spouses. You can contribute up to the annual 401(k) limit each year, and you can contribute a set percentage of your compensation 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.
There are pros and cons to each plan, and which may be better suited to you will depend on the nature of your business and your employees' needs. Different accounts have varying tax benefits, expenses, required minimum distributions, limits on how much you can put in each year, and more. A knowledgeable 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 Glendale, MO
The particular, financial-based benefits for your Glendale, MO small business retirement plan will largely be based on the specific plan you set up. However, a small business retirement plan, whichever one you choose, has universal benefits. Three out of five employees say that a retirement plan is a "very important" factor in job satisfaction, 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 financial security in retirement
- 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 they withdraw them
- As interest accrues, small contributions grow into considerable sums of money
- Ability to perform a 401(k) rollover if they change employers
- Attract, recruit, and retain high performers
- Promote great work ethic
- Employer contributions are tax-deductible
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Why Should I Consult With a Financial Advisor in Glendale, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently obligate any business to offer a retirement plan to workers, some states require employers with a minimum number of employees to have a retirement plan. Glendale, MO retirement consultants that are experienced in helping business owners establish retirement plans are usually needed to not only ensure the plan is right for you, but that you follow frequently chancing tax and business laws.
As your Glendale, MO retirement plan consultants for your small business, our financial planners 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, arranging a trust for plan assets, helping employees understand how specific of the plan apply to their retirement, and creating a record keeping system
- Help you operate your plan by staying compliant with 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 component to their ongoing financial health
Correct Capital's Glendale, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to only work in your best interest. 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 Glendale, 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 Glendale, MO | Correct Capital
Operating a small business comes with a mountain of moving parts and 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 for a variety of types of businesses, 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 we can do for business owners, call Correct Capital today at 314-930-401K or contact us through our website.
*as of January 2022