Small Business Retirement Plans in St. Louis, MO. Offering a retirement plan to your St. Louis, MO employees is a great way to retain talent, incentivize higher performance, and get those much-needed tax breaks. 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 retiring and my business will no longer be running? Correct Capital's team of St. Louis, 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 navigate the ins-and-outs of federal regulations. Whether you're interested in modifying an existing plan or need to set up a plan, 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, 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 — A "Simplified Employee Pension" is a type of individual retirement account that 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 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" is an acronym 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. 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 strictly for owner-only businesses, or employers with up to 5 employees. With this plan, you target how much they would like to have in retirement, 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 costs and fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers employees tax breaks for contributions and investment opportunities. There are annual contribution limits. Most 401(k) plans offer significant tax planning advantages for both companies and workers. They can include:
- Individual 401(k) — Also referred to as an i401(k), this plan functions similarly to a business 401(k), but for people who are self-employed, or whose only employee is a spouse. A maximum contribution level is set each year, and you can contribute a set percentage of your 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 advantages and drawbacks, and it's impossible to say which is "best" for you without knowing your specific situation. Different retirement have varying tax advantages, fees, required minimum distributions, limits on how much you can put in each year, 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.
Benefits of Setting Up a Small Business Retirement Plan in St. Louis, MO
The particular, financial-based benefits for your St. Louis, 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 say that a retirement plan 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:
- More confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through 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
- Attract, recruit, and retain high performers
- Incentivize based on performance-based employer contributions
- Deduct your taxable income from your taxable income
- 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, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is complicated. While the federal government does not currently obligate any employer to offer a retirement plan to workers, certain states require businesses with a certain number of employees to offer access to a retirement plan. St. Louis, MO retirement consultants that have spent years helping business owners open retirement plans are usually needed to not only make sure you get the benefits you're looking for, but that you follow frequently chancing tax and business laws.
As your St. Louis, MO retirement plan consultants for your small business, our team will:
- Help you decide which plan works best for you and your employees, and which financial institution should hold the assets
- Assist you in establishing 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 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. Louis, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically obligated to do what's best for you and your employees. 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, MO include:
Small Business Retirement Plans in St. Louis, MO | Correct Capital
Operating a small business involves a plethora 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 for a variety of types of businesses, and represents over $230 million in total plan assets* across the United States. 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