Small Business Retirement Plans in St. Clair County, IL. Offering a retirement plan to your St. Clair County, IL employees is a great way to retain talent, boost performance, and get those much-desired tax reductions. While the benefits may be obvious, the complexities of establishing and maintaining small business retirement plans are not. What type of plan is best for your business? What are the different laws I'll have to follow? What happens when I want to change plans, or if I'm retiring and my business will no longer be running? Correct Capital's team of St. Clair County, IL financial planners is dedicated to helping business owners and their employees get the most out of their retirement plans and navigate the ins-and-outs of financial law. Whether you already have a plan and want insight as to how it's performing or are looking to create an entirely new one, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in St. Clair County, IL?
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 kind 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 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 are required to contribute an equal percentage of compensation to employees as to their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these IRAs are for businesses with up to 100 employees. Employers can contribute 2% of an employee's compensation, or dollar-to-dollar match an employee's contribution up to 3%.. 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 strictly for owner-only businesses, or businesses with up to 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are adjusted each year based on that, with a maximum limit set each year. While this plan is highly customizable and allows for significant contributions, there may be startup costs.
- Business 401(k) Plan — 401(k)s can be set up by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans offer considerable tax planning benefits 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 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 the employer may make a nonelective contribution up to 25% of 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.
There are pros and cons to each plan, and which may be better suited to you will depend on your business and your and your employees' needs. Different plans have varying tax advantages, costs, required minimum distributions, contribution limits, and more. A reputed financial advisor like those at Correct Capital will be able to help you determine which plan works best for you and your team.
Benefits of Setting Up a Small Business Retirement Plan in St. Clair County, IL
The particular, financial-based advantages to your St. Clair County, IL 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. Three out of five workers responded to a survey stating it 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. Companies and employees will both enjoy:
Employee Benefits
- More confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- They do not pay taxes on contributions or how the money grew until distributed
- As interest accrues, small savings grow into considerable sums of money
- Ability to conduct 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 income
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in St. Clair County, IL to Help With My Small Business Retirement Plan?
Setting up small business retirement plans is far different from setting up a personal account at your local St. Clair County, IL bank. While the federal government does not currently obligate any company to offer retirement savings options to workers, some states require employers with a certain number of employees to offer access to a retirement plan. St. Clair County, IL retirement consultants that are experienced in helping business owners open retirement plans are usually needed to not only ensure you and your employees get the most out of your plan, but that you follow evolving tax and business laws.
As your St. Clair County, IL retirement plan consultants for your small business, our financial planners will:
- Help you choose the "right" plan for you, and the right custodian to hold plan assets
- Assist you in setting up 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 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 health
Correct Capital's St. Clair County, IL financial planners are fiduciary advisors, meaning we are obligated, by law and by ethics to only offer advice based on what we believe is in your best interest. We work for you, and not our own firm. Schedule a meeting with a member of our advisor team today.
Other services we offer in St. Clair County, IL 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. Clair County, IL | Correct Capital
Owning a small business involves countless daily, monthly, and annual 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 314-930-401K or contact us through our website.
*as of January 2022
