Small Business Retirement Plans in Oakland, MO. Starting up a retirement plan for you and your Oakland, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. 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 Oakland, MO financial planners has over 70 years of combined experience helping business owners and their employees reap the benefits of their retirement plans and understanding the specifics of federal regulations. For anything from initial setup and employee guidance to making annual adjustments, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Are Available to Small Businesses in Oakland, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. Among the most common small business retirement plans are:
- SEP-IRA — This kind of individual retirement account 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 yearly earnings or $66,000 (as of 2023). Employers are required to contribute an equal percentage of compensation to their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" is an acronym 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. Contributions are made through salary deferrals and employer contributions. This is relatively inexpensive for employers as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is reserved for owner-only businesses, or employers with up to 5 employees. With this plan, you target how much they would like to have in retirement, and contribution limits are modified each year based on that, with a maximum limit set each year. While this plan is highly customizable and allows for significant contributions, 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 considerable tax planning benefits for both employers and workers. Common types of 401(k) plans include:
- Individual 401(k) — Also known as a Solo 401(k), this plan has many of the same rules and benefits as a business 401(k), but for people who are self-employed, or whose 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 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.
Each plan has its own benefits and drawbacks, and there's no telling what's "best" for you without knowing your specific situation. Different accounts have different tax breaks, costs, required minimum distributions, contribution limits, and more. A knowledgeable 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 Oakland, MO
The particular, financial-based benefits for your Oakland, MO small business retirement plan is dependent upon which plan you set up. That said, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. Three out of five employees say that a retirement plan is a "very important" factor in how good they feel at their present employment, while employers also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
- Improved confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through 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 they change employers
- Attract, recruit, and retain high performers
- Promote great work ethic
- Employer contributions are tax-deductible
- Flexible plan options to fit your plan to your needs
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Oakland, MO to Help With My Small Business Retirement Plan?
Setting up small business retirement plans is not the same thing as setting up a personal savings plan at your local Oakland, MO bank. While the federal government does not currently obligate any company to offer retirement savings options to employees, certain states require businesses of a certain size to have a retirement plan. Oakland, MO retirement consultants that have spent years helping business owners set up retirement plans are usually needed to not only ensure you get the benefits you're looking for, but that you abide by ever-changing tax and business laws.
As your Oakland, MO retirement plan consultants for your small business, our advisers will:
- Help you decide the best plan for you, and which financial institution should house 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 how specific of the plan apply to their savings, and creating a record keeping system
- Help you operate your plan by keeping up-to-date 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 important aspect of their continued financial success
Correct Capital's Oakland, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to do what's best for you and your employees. We work for you, and not our own firm. Schedule a consultation with a member of our advisor team today.
Other services we offer in Oakland, MO include:
- 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
- Rollover 401(k)
Small Business Retirement Plans in Oakland, MO | Correct Capital
Operating a small business comes with countless 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* nationwide. 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 314-930-401K or contact us online.
*as of January 2022