Small Business Retirement Plans in Imperial, MO. Setting up a retirement plan for you and your Imperial, MO employees is a great way to retain talent, incentivize higher performance, and get those much-needed tax breaks. However, for most business owners, it can be hard to know where to start. What type of plan is best for your business? What are the different laws I'll have to follow? What happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Imperial, MO financial planners is dedicated to helping business owners and their employees get the most out of having a sound retirement plans and navigate the complexity of federal regulations. Whether you already have a plan and want insight as to how it's performing or need to set up a plan, call Correct Capital today at 877-930-4015 or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Imperial, 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 business with no non-owner employees, or those with very few employees. It functions similarly to a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. Contributions are limited to the lessor of 25% of an employee's yearly earnings or $66,000 (as of 2023). Employers can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" is an acronym for "Savings Investment Match Plan for Employees," and these plans are for businesses with up to 100 employees. 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 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 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 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, you will have to pay 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 come with considerable tax planning advantages for both companies and employees. Common types of 401(k) plans include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also called an Owner-Only 401(k), this plan functions similarly to 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 the employer may make a nonelective contribution up to 25% of compensation or, if self-employed, an amount calculated by looking at 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 plans have varying tax advantages, costs, required minimum distributions, contribution limits, and more. An experienced financial advisor like our team at Correct Capital will review your options and help you in choosing the best retirement plan for your small business.
Benefits of Setting Up a Small Business Retirement Plan in Imperial, MO
The particular, financial-based benefits for your Imperial, 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. Over half of workers 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. Companies and employees will both enjoy:
Employee Benefits
- More confidence in their retirement planning
- Tax deductions
- Contributions are simple with salary deferral
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small savings grow into considerable savings
- Ability to perform a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain talent
- Incentivize based on performance-based employer contributions
- Deduct your taxable income from your taxable profits
- Flexible plan options to fit your plan to your needs
- Tax credits that can help reduce startup costs
Why Should I Consult With a Financial Advisor in Imperial, MO to Help With My Small Business Retirement Plan?
Creating small business retirement plans is far different from setting up a personal account at your local Imperial, MO bank. While the federal government does not currently require any employer to offer a retirement plan to workers, some states require employers with a minimum number of employees to have a retirement plan. Imperial, MO retirement consultants that have spent years helping business owners establish 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 Imperial, MO retirement plan consultants for your small business, our advisers will:
- Help you choose which plan works best for you and your employees, and which financial institution should house the 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 creating a record keeping system
- Help you operate your plan by keeping up-to-date 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 important aspect of their ongoing financial health
Correct Capital's Imperial, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by regulatory oversight to only offer advice based on what we believe is in your best interest. The only thing we sell is trust. Schedule a meeting with a member of our advisor team today.
Other services we offer in Imperial, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
Small Business Retirement Plans in Imperial, MO | Correct Capital
Owning 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 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 we can do for business owners, call Correct Capital today at 877-930-4015 or contact us online.
*as of January 2022
