Small Business Retirement Plans in Huntleigh, MO. Offering a retirement plan to your Huntleigh, 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 difficult to know how to proceed once they decide to establish one. What benefits do different kinds of plans provide? What are the different laws that apply to different plans? 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 Huntleigh, MO financial planners has over 70 years of combined experience helping business owners and their employees get the most out of having a sound retirement plans and navigate the complexity of their individual plans and benefits. For anything from initial setup and employee guidance to making annual adjustments, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Huntleigh, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. 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 owner-only businesses, people who do freelance work, and businesses 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 the lessor of 25% of an employee's compensation or $66,000 (as of 2023). 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. Employers can contribute 2% of an employee's compensation, or dollar-to-dollar match an employee's contribution up to 3%.. 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 strictly for owner-only businesses, or businesses with no more than 5 employees. With this plan, an employee decides on how much they would like to have in retirement, and contribution limits are adjusted each year based on that, with a maximum limit set each year. While this plan allows for high contributions and a plan tailored to each individual, there may be 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. There are annual contribution limits. 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 an Owner-Only 401(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 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 may also decide to open a Roth 401(k) account, or roll over pre-tax assets.
Each plan has its own advantages and drawbacks, and there's no telling what's "best" for you without knowing your specific situation. Different retirement have different tax benefits, expenses, 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 Huntleigh, MO
The specific, financial-based advantages to your Huntleigh, MO small business retirement plan is dependent upon which plan you choose. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of workers 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
- Better financial security in retirement
- Tax deductions
- 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 savings grow into considerable sums of money
- Ability to perform a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain high performers
- Promote great work ethic
- Deduct your taxable income from your taxable income
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Why Should I Consult With a Financial Advisor in Huntleigh, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is complicated. While the federal government does not currently obligate any company to offer a retirement plan to workers, certain states require businesses of a certain size to have a retirement plan. Huntleigh, MO retirement consultants that have spent years helping business owners create retirement plans are usually needed to not only make sure the plan is right for you, but that you follow ever-changing tax and business laws.
As your Huntleigh, MO retirement plan consultants for your small business, our advisers will:
- Help you decide the best plan for you, and which financial institution should hold the assets
- Assist you in setting up your plan, including creating a document that complies with IRS code, arranging a trust for plan assets, helping employees understand how specific of the plan apply to their retirement, and implementing 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 they can use it as a component to their continued financial journey
Correct Capital's Huntleigh, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated 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. Request a consultation with a member of our advisor team today.
Other services we offer in Huntleigh, 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 Huntleigh, MO | Correct Capital
Owning 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 for a variety of types of businesses, 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
