Small Business Retirement Plans in St. Charles, MO. Offering a retirement plan to your St. Charles, MO employees is a great way to retain talent, incentivize higher performance, and get those much-needed tax breaks. However, for most business owners, it can be difficult to know where to start. What type of plan is best for your business? 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 St. Charles, 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 financial law. For anything from initial setup and employee guidance to fine-tuning an existing plan, 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, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. Depending on your specific needs, you may open any of the following:
- SEP-IRA — This type of individual retirement account is available to business with no non-owner employees, or those with very few employees. It functions similarly to a traditional IRA, where the money put into the account grows tax-deferred. You cannot contribute more than 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 employees as 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 for businesses with up to 100 employees. Employees can fund their own accounts through salary deferrals, and employers can also contribute. This is relatively inexpensive for employers as employees usually make the majority of the contribution, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is reserved for owner-only businesses, or those with up to 5 employees. With this plan, an employee decides on a desired level of retirement income, and contribution limits are modified 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 annual fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers tax incentives and investment opportunities. There are annual contribution limits. Most 401(k) plans come with considerable tax planning advantages for both businesses and workers. 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 a One-Participant 401(k), this plan functions similarly to a business 401(k), but only for owner-only businesses, or businesses where the only employee is a spouse. You can contribute up to the annual 401(k) limit 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 retirement have different tax benefits, fees, required minimum distributions, contribution limits, and more. A reputed financial advisor like our team 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 St. Charles, MO
The specific, financial-based advantages to your St. Charles, 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, benefit employers and employees in the same way. Over half of workers 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. Companies and employees will both enjoy:
Employee Benefits
- Better 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 contributions grow into significant savings
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Employer contributions are tax-deductible
- Highly customized plans are available
- Tax credits upon initial set-up
Why Should I Consult With a Financial Advisor in St. Charles, MO to Assist With My Small Business Retirement Plan?
Creating small business retirement plans is far different from setting up a personal savings plan at your local St. Charles, MO bank. While the federal government does not currently obligate any business to offer a retirement plan to employees, certain states require businesses with a minimum number of employees to have a retirement plan. St. Charles, MO retirement consultants that have spent years helping business owners open retirement plans are usually needed to not only make sure you and your employees get the most out of your plan, but that you follow ever-changing tax and business laws.
As your St. Charles, MO retirement plan consultants for your small business, our financial planners will:
- Help you choose which plan works best for you and your employees, and the right custodian to hold plan assets
- Assist you in establishing 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 implementing a record keeping system
- Help you operate your plan by adapting as we need to to applicable 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 journey
Correct Capital's St. Charles, MO financial planners are fiduciary advisors, meaning we are legally and ethically bound 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. Schedule a meeting with a member of our advisor team today.
Other services we offer in St. Charles, 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, MO | Correct Capital
Operating a small business involves a mountain of moving parts and tasks to ensure things run smoothly — setting up and maintaining 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
