Small Business Retirement Plans in Sappington, MO. Offering a retirement plan to your Sappington, 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 difficult 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 happens when a new plan seems like a better option, or if I'm closing my business? Correct Capital's team of Sappington, MO financial planners is dedicated to helping business owners and their employees get the most out of having a sound retirement plans and navigate the ins-and-outs of their individual plans and benefits. Whether you're interested in modifying an existing plan or are looking to create an entirely new one, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Sappington, MO?
The federal government and various financial institutions offer different plans and accounts for small business owners and their employees to better prepare for retirement. 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 contributions are tax-deductible, and distributions are taxed as income. Contributions are limited to 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 IRAs are for businesses with up to 100 employees. Contributions are made through salary deferrals and employer contributions. This plan is low-cost as it's mainly funded by employees, and employer contributions can be deducted as a business expense.
- 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, an employee targets 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 allows for high contributions and a plan tailored to each individual, there may be costs and fees.
- Business 401(k) Plan — 401(k)s can be established by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans offer significant tax planning benefits for both businesses and workers. Common types of 401(k) plans include:
- Individual 401(k) — Also called a Solo 401(k), this plan has many of the same rules and benefits as a business 401(k), but businesses made up only of an owner or of spouses. 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 can choose 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 plans have different tax benefits, costs, required minimum distributions, maximum contributions, and more. An experienced financial advisor like ours here at Correct Capital will review your options and aid you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Sappington, MO
The specific, financial-based advantages to your Sappington, MO small business retirement plan will largely be based on the specific plan you set up. However, a small business retirement plan, whichever one you choose, has universal benefits. Over half of workers say that a retirement plan 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 setting up a small business retirement plan:
- More financial security in retirement
- Tax deductions
- Contributions are simple with salary deferral
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small contributions grow into significant savings
- Ability to conduct a 401(k) rollover if it's beneficial down the road
- 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
Do I Need a Financial Advisor in Sappington, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is complicated. While the federal government does not currently require any employer to offer a retirement plan to workers, some states require businesses with a certain number of employees to have a retirement plan. Sappington, MO retirement consultants that have spent years helping business owners establish retirement plans are usually needed to not only make sure you get the benefits you're looking for, but that you follow frequently chancing tax and business laws.
As your Sappington, MO retirement plan consultants for your small business, our team will:
- Help you elect the best 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 how specific of the plan apply to their savings, and developing a record keeping system
- Help you operate your plan by staying compliant with applicable 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 Sappington, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by ethics to only work in your best interest. 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 Sappington, MO include:
- 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
- Retirement Planning
Small Business Retirement Plans in Sappington, MO | Correct Capital
Owning a small business comes with countless moving parts and tasks to ensure things run smoothly — setting up and maintaining 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, call Correct Capital today at 314-930-401K or contact us through our website.
*as of January 2022