Small Business Retirement Plans in St. Charles County, MO. Offering a retirement plan to your St. Charles County, 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 hard to know where to start. What benefits do different kinds of plans provide? What federal regulations do I have to follow? What do I do when I want to change plans, or if I'm closing my business? Correct Capital's team of St. Charles County, 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. Whether you already have a plan and want insight as to how it's performing or are looking to create an entirely new one, speak to a financial advisor at Correct Capital today at 877-930-4015 or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in St. Charles County, 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 type of individual retirement account is available to owner-only businesses, people who do freelance work, and businesses with very few employees. It functions similarly to a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. You cannot contribute more than the lessor of 25% of an employee's compensation or $66,000 (as of 2023). Employers can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these individual retirement accounts are frequently seen 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 businesses with no more than 5 employees. With this plan, you target how much they would like to have in retirement, and contribution limits are modified annually based on that, with a maximum limit set each year. While this plan is highly customizable and allows for significant contributions, there may be costs and fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers employees tax breaks for contributions and allows employees to invest savings so the money can benefit them later. There are annual contribution limits. 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 known as an i401(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. 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 benefits and drawbacks, and there's no telling what's "best" for you without knowing your specific situation. Different accounts have different tax benefits, costs, required minimum distributions, contribution limits, and more. A prudent financial advisor like ours here 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 St. Charles County, MO
The particular, financial-based benefits for your St. Charles County, 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. Over half of workers responded to a survey saying it is a "very important" factor in job satisfaction, 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
- Improved confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with payroll deductions
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small savings grow into considerable savings
- 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
- Deduct your taxable income from your taxable profits
- 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 St. Charles County, MO to Help With My Small Business Retirement Plan?
Setting up small business retirement plans is far different from setting up a personal savings plan at your local St. Charles County, MO bank. While the federal government does not currently obligate any company to offer a retirement plan to workers, certain states require employers of a certain size to offer access to a retirement plan. St. Charles County, MO retirement consultants that have spent years helping business owners create retirement plans are usually needed to not only make sure the plan is right for you, but that you follow evolving tax and business laws.
As your St. Charles County, MO retirement plan consultants for your small business, our financial planners will:
- Help you decide the "right" plan for you, and which financial institution should house the 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 retirement, and implementing 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 ongoing financial success
Correct Capital's St. Charles County, MO advisors hold ourselves to the fiduciary standard, 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. Request a meeting with a member of our advisor team today.
Other services we offer in St. Charles County, 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 St. Charles County, MO | Correct Capital
Owning a small business comes with a plethora of 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* 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 through our website.
*as of January 2022
