Small Business Retirement Plans in St. Louis, MO. Offering a retirement plan to your St. Louis, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain talent. While the benefits may be obvious, the complexities of opening and maintaining small business retirement plans are not. What type of plan is best for your business? What are the different laws that apply to different plans? What happens when a new plan seems like a better option, or if I'm closing my business? 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 understanding the ins-and-outs of their individual plans and benefits. For anything from initial setup and employee guidance to fine-tuning an existing plan, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in St. Louis, MO?
Uncle Sam and different financial institutions 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 kind 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 the money put into the account grows tax-deferred. 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" stands 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 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 employers with no more than 5 employees. With this plan, an employee decides on a desired level of retirement income, and contribution limits are modified annually based on that, with a maximum limit set each year. 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 can be established by private companies of any size, and are highly customizable. Employees may defer their salary as contributions, and employers can make annual contributions. Most 401(k) plans offer considerable tax planning benefits for both companies and workers. Common types of 401(k) plans include:
- Individual 401(k) — Also called an Owner-Only 401(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 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 may also decide 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 "best" for you will be based on your business and your and your employees' needs. Different plans have different tax breaks, costs, required minimum distributions, contribution limits, and more. A prudent 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. Louis, MO
The particular, financial-based benefits for your St. Louis, MO small business retirement plan is dependent upon which plan you choose. However, 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 job satisfaction, while employers also get tax breaks and can better attract and motivate employees. Below are some of the main benefits for both businesses and employees of setting up a small business retirement plan:
- Improved confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with payroll deductions
- They do not pay taxes on contributions or how the money grew until they withdraw them
- 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 talent
- Promote great work ethic
- Deduct your taxable income from your taxable profits
- Flexible plan options to fit your plan to your needs
- Tax credits that can help reduce startup costs
Do I Need a Financial Advisor in St. Louis, MO to Help With My Small Business Retirement Plan?
Creating small business retirement plans is complicated. While the federal government does not currently require any employer to offer a retirement plan to workers, certain states require businesses of a certain size 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 ensure the plan is right for you, but that you abide by evolving tax and business laws.
As your St. Louis, 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 which financial institution should house the 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 retirement, and creating a record keeping system
- Help you operate your plan by staying compliant 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 part of their ongoing financial success
Correct Capital's St. Louis, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by ethics to only offer advice based on what we believe is in your best interest. The only product we offer is trust. Request a meeting with a member of our advisor team today.
Other services we offer in St. Louis, 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, MO | Correct Capital
Owning 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* across the United States. To set up a retirement plan for your small business, or learn what we can do for business owners, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us online.
*as of January 2022