Small Business Retirement Plans in Richmond Heights, MO. Offering a retirement plan to your Richmond Heights, MO employees is a great way to retain talent, incentivize higher performance, and get those much-desired tax reductions. While the benefits may be clear, 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 a new plan seems like a better option, or if I'm closing my business? Correct Capital's team of Richmond Heights, MO financial planners is committed to helping business owners and their employees get the most out of their retirement plans and understanding the ins-and-outs of federal regulations. For anything from initial setup and employee guidance to making annual adjustments, call Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Richmond Heights, 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 contributions are tax-deductible, and distributions are taxed as income. You cannot contribute more than 25% of an employee's compensation or $66,000 (as of 2023), whichever is less. 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 commonly thought of 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 the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is reserved for business with no non-owner employees, or employers with no more than 5 employees. With this plan, you target 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 have to pay startup costs.
- Business 401(k) Plan — 401(k)s can be established 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 offer significant tax planning benefits for both businesses and employees. Common types of 401(k) plans include:
- Individual 401(k) — Also referred to as a One-Participant 401(k), this plan is aimed at offering similar benefits to 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 income 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 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 depend on the nature of your business and your employees' needs. Different plans have different tax benefits, fees, required minimum distributions, maximum contributions, and more. A prudent financial advisor like our team at Correct Capital will be able to help you determine which plan works best for you and your team.
Why You Should Set Up a Small Business Retirement Plan in Richmond Heights, MO
The specific, financial-based advantages to your Richmond Heights, MO small business retirement plan will largely be based on the specific plan you choose. However, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. 60% of employees say that a retirement plan is a "very important" factor in job satisfaction, 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 establishing a small business retirement plan:
- Better confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- Contributions and investment gains are not taxed until they withdraw them
- Over the years small contributions grow into considerable sums of money
- Ability to conduct a 401(k) rollover if they change employers
- Attract, recruit, and retain talent
- Incentivize based on performance-based employer contributions
- Employer contributions are tax-deductible
- 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 Richmond Heights, 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 account at your local Richmond Heights, MO bank. While the federal government does not currently obligate any company to offer a retirement plan to workers, some states require businesses of a certain size to have a retirement plan. Richmond Heights, MO retirement consultants that have spent years helping business owners create retirement plans are usually needed to not only ensure the plan is right for you, but that you abide by evolving tax and business laws.
As your Richmond Heights, MO retirement plan consultants for your small business, our team will:
- Help you elect the "right" plan for you, 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 how specific of the plan apply to their savings, and developing 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 it can serve as a important aspect of their ongoing financial health
Correct Capital's Richmond Heights, MO financial planners are fiduciary advisors, meaning we are obligated, by law and by regulatory oversight to only offer advice based on what we believe is 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. Schedule a meeting with a member of our advisor team today.
Other services we offer in Richmond Heights, 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
- Retirement Calculator
Small Business Retirement Plans in Richmond Heights, MO | Correct Capital
Operating a small business comes with a mountain of 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* nationwide. 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