Small Business Retirement Plans in Ladue, MO. Establishing a retirement plan for you and your Ladue, MO employees is a great way to retain talent, boost performance, and get those much-desired tax breaks. However, for most business owners, it can be hard to know how to proceed once they decide to establish one. What type of plan is best for your business? What federal regulations do I have to follow? What do I do 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 Ladue, MO financial planners is committed to helping business owners and their employees reap the rewards of their retirement plans and understanding the complexity of financial law. Whether you're interested in modifying an existing plan or are looking to create an entirely new one, call Correct Capital today at 877-930-4015 or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Ladue, 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. Depending on the specifics of your business, you may open any of the following:
- SEP-IRA — This type of individual retirement account is available to business with no non-owner employees, or those 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 the lessor of 25% of an employee's compensation or $66,000 (as of 2023). 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" stands for "Savings Investment Match Plan for Employees," and these plans are for businesses with up to 100 employees. 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 those with up to 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are modified 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 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 investment opportunities. 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 workers. They can include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also called a One-Participant 401(k), this plan has many of the same rules and benefits as 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 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 there's no telling what's "best" for you without knowing your specific situation. Different accounts have different tax breaks, expenses, required minimum distributions, contribution limits, and more. An experienced financial advisor like ours here 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 Ladue, MO
The specific, financial-based advantages to your Ladue, 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. Three out of five 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. Below are some of the main benefits for both businesses and employees of having a small business retirement plan:
Employee Benefits
- Better confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with salary deferral
- Contributions and investment gains are not taxed until distributed
- As interest accrues, small savings grow into significant sums of money
- 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
- 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 Ladue, MO to Help 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 Ladue, MO bank. While the federal government does not currently obligate any business to offer retirement savings options to workers, some states require employers of a certain size to have a retirement plan. Ladue, MO retirement consultants that are experienced in helping business owners open 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 Ladue, MO retirement plan consultants for your small business, our financial planners will:
- Help you decide which plan works best for you and your employees, and the right custodian to hold plan assets
- Assist you in establishing your plan, including adopting a written plan, 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 staying compliant with relevant 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 part of their continued financial journey
Correct Capital's Ladue, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically obligated to only work in your best interest. The only thing we sell is trust. Request a consultation with a member of our advisor team today.
Other services we offer in Ladue, 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 Ladue, MO | Correct Capital
Operating a small business involves countless daily, monthly, and annual 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 877-930-4015 or contact us online.
*as of January 2022
