Small Business Retirement Plans in St. Louis County, MO. Starting up a retirement plan for you and your St. Louis County, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. However, many business owners understandably have questions about small business retirement plans. What type of plan is best for your business? 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 St. Louis County, MO financial planners is committed to helping business owners and their employees reap the rewards of having a sound retirement plans and understanding the ins-and-outs of federal regulations. 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 through our website.
What Types of Retirement Plans Are Available to Small Businesses in St. Louis County, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as when plan participants enjoy tax benefits. Among the most common small business retirement plans are:
- SEP-IRA — This type of individual retirement account is available to self-employed business owners with no employees, freelancers, and businesses with very few employees. It functions similarly to a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. The maximum contribution in a given year is 25% of an employee's yearly earnings or $66,000 (as of 2023), whichever is less. Employers are required to contribute an equal percentage of compensation to their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" is an acronym for "Savings Investment Match Plan for Employees," and these IRAs 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 the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is only available to owner-only businesses, or businesses with no more than 5 employees. With this plan, an employee decides on how much they would like to have in retirement, and contribution limits are modified each year 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, you will be subject to annual fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers tax incentives and allows employees to invest savings so the money can benefit them later. There are annual contribution limits. Most 401(k) plans come with considerable tax planning advantages for both businesses and employees. Common types of 401(k) plans include:
- Individual 401(k) — Also known 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 compensation 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 accounts have varying tax benefits, costs, required minimum distributions, limits on how much you can put in each year, and more. A reputed financial advisor like ours here 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. Louis County, MO
The particular, financial-based benefits for your St. Louis County, MO small business retirement plan is dependent upon which 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. Below are some of the main benefits for both businesses and employees of having a small business retirement plan:
- Better confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through salary deferral
- They do not pay taxes on contributions or how the money grew until distributed
- Over the years small savings grow into significant savings
- Ability to perform a 401(k) rollover if they change employers
- Attract, recruit, and retain your best employees
- 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 upon initial set-up
Do I Need a Financial Advisor in St. Louis County, MO to Assist 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. Louis County, MO bank. While the federal government does not currently obligate any business to offer a retirement plan to workers, some states require businesses with a minimum number of employees to have a retirement plan. St. Louis County, MO retirement consultants that have spent years helping business owners establish retirement plans are usually needed to not only ensure the plan is right for you, but that you follow ever-changing tax and business laws.
As your St. Louis County, MO retirement plan consultants for your small business, our financial planners will:
- Help you elect the best plan for you, and the right custodian to hold plan assets
- Assist you in setting up your plan, including adopting a written plan, 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 keeping up-to-date with 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 continued financial health
Correct Capital's St. Louis County, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by regulatory oversight to only work 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. Louis County, 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 St. Louis County, MO | Correct Capital
Operating a small business involves countless moving parts and 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 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 314-930-401K or contact us through our website.
*as of January 2022