Small Business Retirement Plans in St. Louis Hills, MO. Setting up a retirement plan for you and your St. Louis Hills, 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 federal regulations do I have to follow? What do I do 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. Louis Hills, MO financial planners has over 70 years of combined experience helping business owners and their employees get the most out of their retirement plans and understanding the complexity of financial law. Whether you're interested in modifying an existing plan or are looking to create an entirely new one, call Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in St. Louis Hills, MO?
The federal government and different financial custodians offer different plans and accounts for small business owners and their employees to aid in there retirement planning. Depending on the specifics of your business, 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 follows the same rules as a traditional IRA, where contributions are tax-deductible, and distributions are taxed as income. You cannot contribute more than 25% of an employee's yearly earnings or $66,000 (as of 2023), whichever is less. Employers can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" is an acronym for "Savings Investment Match Plan for Employees," and these IRAs are frequently seen as "start-up" retirement savings plans for smaller businesses that do not yet offer a plan. Employees can fund their own accounts through salary deferrals, and employers can also contribute. 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 those with up to 5 employees. With this plan, an employee decides on 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 annual fees.
- Business 401(k) Plan — 401(k)s can be opened by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans come with considerable tax planning benefits for both companies and workers. Common types of 401(k) plans include:
- 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. You can contribute up to the annual 401(k) limit each year, and the employer may make a nonelective contribution up to 25% of compensation or, if self-employed, an amount considering 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 which may be "best" for you will depend on your business and your and your employees' needs. Different accounts have varying tax breaks, costs, required minimum distributions, contribution limits, and more. A knowledgeable financial advisor like those 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. Louis Hills, MO
The specific, financial-based advantages to your St. Louis Hills, MO small business retirement plan will largely be based on the specific plan you choose. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of employees 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:
- Improved confidence in their retirement planning
- Reduced taxable income
- 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 contributions grow into significant sums of money
- Ability to conduct a 401(k) rollover if it's beneficial down the road
- Attract, recruit, and retain high performers
- Incentivize based on performance-based employer contributions
- Employer contributions are tax-deductible
- 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 Hills, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently require any company to offer a retirement plan to workers, some states require employers with a certain number of employees to have a retirement plan. St. Louis Hills, MO retirement consultants that have spent years helping business owners open 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 Hills, MO retirement plan consultants for your small business, our financial planners will:
- Help you decide which plan works best for you and your employees, and the right custodian to hold plan assets
- Assist you in setting up 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 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 it can serve as a component to their continued financial success
Correct Capital's St. Louis Hills, MO financial planners are fiduciary advisors, meaning we are obligated, by law and by regulatory oversight 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 consultation with a member of our advisor team today.
Other services we offer in St. Louis Hills, 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 Hills, MO | Correct Capital
Operating a small business involves a plethora of daily, monthly, and annual 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 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 online.
*as of January 2022