Small Business Retirement Plans in Jefferson County, MO. Starting up a retirement plan for you and your Jefferson County, MO employees is a great way to retain talent, boost performance, and get those much-desired tax reductions. However, many business owners understandably have questions about small business retirement plans. What benefits do different kinds of plans provide? What federal regulations do I have to follow? What happens when I want to change plans, or if I'm closing my business? Correct Capital's team of Jefferson County, 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 specifics of their individual plans and benefits. For anything from initial setup and employee guidance to fine-tuning an existing plan, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Jefferson County, MO?
The federal government and different financial custodians offer different plans and accounts for small business owners and their employees to aid in there retirement planning. 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. Contributions are limited to 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 plans are often 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 businesses with up to 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are modified annually 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 be subject to annual fees.
- Business 401(k) Plan — 401(k)s are available to 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 benefits for both businesses and employees. Common types of 401(k) plans include:
- Individual 401(k) — Also known as a Solo 401(k), this plan functions similarly 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 the employer may make a nonelective contribution up to 25% of 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 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 which may be better suited to you will be based on the nature of your business and your employees' needs. Different accounts have varying tax breaks, fees, required minimum distributions, limits on how much you can put in each year, and more. An experienced 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 Jefferson County, MO
The particular, financial-based benefits for your Jefferson County, MO small business retirement plan is dependent upon which plan you choose. That said, 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 saying 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:
- More confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with salary deferral
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small contributions grow into considerable savings
- Ability to perform a 401(k) rollover if they change employers
- Attract, recruit, and retain talent
- Promote great work ethic
- Deduct your taxable income from your taxable income
- 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 Jefferson County, 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 company to offer retirement savings options to workers, certain states require employers of a certain size to offer access to a retirement plan. Jefferson County, MO retirement consultants that have spent years helping business owners set up retirement plans are usually needed to not only make sure the plan is right for you, but that you follow evolving tax and business laws.
As your Jefferson County, MO retirement plan consultants for your small business, our team 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, establishing a trust for plan assets, helping employees understand the plan's terms, and developing a record keeping system
- Help you operate your plan by adapting as we need to to relevant 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 continued financial success
Correct Capital's Jefferson County, MO financial planners are fiduciary advisors, meaning we are obligated, by law and by ethics 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. Request a consultation with a member of our advisor team today.
Other services we offer in Jefferson County, 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 Jefferson County, MO | Correct Capital
Operating 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* across the United States. To set up a retirement plan for your small business, or learn what we can do for business owners, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us online.
*as of January 2022