Small Business Retirement Plans in Kirkwood, MO. Starting up a retirement plan for you and your Kirkwood, 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 where to start. 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 Kirkwood, MO financial planners is dedicated to helping business owners and their employees get the most out of their retirement plans and understanding the specifics of federal regulations. Whether you're interested in modifying an existing plan or need to set up a plan, call Correct Capital today at 877-930-4015 or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Kirkwood, 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 your specific needs, 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 functions similarly to a traditional IRA, where the money put into the account grows tax-deferred. Contributions are limited to 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 their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these IRAs 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 the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is strictly for owner-only businesses, or businesses with up to 5 employees. With this plan, an employee decides on a desired level of retirement income, 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, you will be subject to costs and fees.
- Business 401(k) Plan — 401(k)s can be set up by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans come with considerable tax planning advantages for both businesses 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 referred to as 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. A maximum contribution level is set each year, and you can contribute a set percentage of your compensation 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 benefits and drawbacks, and it's impossible to say which is "best" for you without knowing your specific situation. Different accounts have different tax advantages, fees, required minimum distributions, maximum contributions, and more. A prudent 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 Kirkwood, MO
The particular, financial-based benefits for your Kirkwood, MO small business retirement plan is dependent upon which plan you set up. 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 also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
Employee Benefits
- Better confidence in their retirement planning
- Tax deductions
- Contributions are simple with payroll deductions
- They do not pay taxes on contributions or how the money grew until they withdraw them
- As interest accrues, small savings grow into significant sums of money
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain talent
- Promote great work ethic
- Employer contributions are tax-deductible
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in Kirkwood, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is not the same thing as setting up a personal savings plan at your local Kirkwood, MO bank. While the federal government does not currently require any business to offer a retirement plan to workers, certain states require businesses of a certain size to have a retirement plan. Kirkwood, MO retirement consultants that have spent years helping business owners open retirement plans are usually needed to not only ensure you and your employees get the most out of your plan, but that you follow frequently chancing tax and business laws.
As your Kirkwood, MO retirement plan consultants for your small business, our team will:
- Help you decide the best plan for you, and the right custodian to hold plan 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 developing a record keeping system
- Help you operate your plan by staying compliant with 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 part of their continued financial journey
Correct Capital's Kirkwood, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to do what's best for you and your employees. The only product we offer is trust. Schedule a consultation with a member of our advisor team today.
Other services we offer in Kirkwood, 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 Kirkwood, MO | Correct Capital
Owning a small business involves a plethora 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* across the United States. To set up a retirement plan for your small business, or learn what other services we offer to business owners, call Correct Capital today at 877-930-4015 or contact us online.
*as of January 2022
