Small Business Retirement Plans in Olivette, MO. Offering a retirement plan to your Olivette, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain your highest-performing workers. While the benefits may be obvious, the difficulties of opening and maintaining small business retirement plans are not. What benefits do different kinds of plans provide? What are the different laws I'll have to follow? What do I do when I want to change plans, or if I'm retiring and my business will no longer be running? Correct Capital's team of Olivette, MO financial planners has over 70 years of combined experience helping business owners and their employees get the most out of having a sound retirement plans and understanding the specifics of federal regulations. For anything from initial setup and employee guidance to fine-tuning an existing 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 Olivette, 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 — 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 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 plans are commonly 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 those with up to 5 employees. With this plan, an employee targets how much they would like to have in retirement, 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 annual fees.
- Business 401(k) Plan — 401(k)s can be established by private companies of any size, and are highly customizable. Employees pick a percentage of their compensation to be contributed, and investments are often held in mutual funds. Most 401(k) plans come with significant 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 referred to as an i401(k), this plan is aimed at offering similar benefits to a business 401(k), but businesses made up only of an owner or of spouses. 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.
Each plan has its own advantages and drawbacks, and which may be better suited to you will be based on your business and your and your employees' needs. Different plans have varying tax benefits, costs, required minimum distributions, limits on how much you can put in each year, and more. A knowledgeable financial advisor like those at Correct Capital will review your options and aid you in choosing the best retirement plan for your small business.
Benefits of Setting Up a Small Business Retirement Plan in Olivette, MO
The specific, financial-based advantages to your Olivette, 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. Over half of workers responded to a survey saying it 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. Below are some of the main benefits for both businesses and employees of setting up a small business retirement plan:
Employee Benefits
- More financial security in retirement
- 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 savings
- Ability to conduct a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain high performers
- Promote great work ethic
- Deduct your taxable income from your taxable profits
- Highly customized plans are available
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in Olivette, MO to Help With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently require any business to offer a retirement plan to employees, certain states require businesses with a minimum number of employees to offer access to a retirement plan. Olivette, MO retirement consultants that are experienced in helping business owners create 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 Olivette, MO retirement plan consultants for your small business, our advisers will:
- Help you choose the "right" plan for you, and the right custodian to hold plan assets
- Assist you in establishing your plan, including creating a document that complies with IRS code, 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 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 component to their continued financial health
Correct Capital's Olivette, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically obligated to do what's best for you and your employees. As an independent firm, we have the freedom and flexibility to tailor our offerings to best suit the goals of our clients. Request a meeting with a member of our advisor team today.
Other services we offer in Olivette, MO include:
- Succession Planning
- 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
Small Business Retirement Plans in Olivette, MO | Correct Capital
Operating a small business involves a plethora of daily, monthly, and annual 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 in both small and large companies, 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 877-930-4015 or contact us through our website.
*as of January 2022
