Small Business Retirement Plans in St. Peters, MO. Offering a retirement plan to your St. Peters, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain your highest-performing workers. 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 happens when a new plan seems like a better option, or if I'm closing my business? Correct Capital's team of St. Peters, MO financial planners has over 70 years of combined experience helping business owners and their employees reap the benefits of their retirement plans and understanding the complexity of their individual plans and benefits. For anything from initial setup and employee education to fine-tuning an existing plan, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in St. Peters, 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. Depending on your specific needs, you may open any of the following:
- SEP-IRA — A "Simplified Employee Pension" is a type of individual retirement account that is available to self-employed business owners with no employees, people who do freelance work, and businesses 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 the lessor of 25% of an employee's compensation or $66,000 (as of 2023). 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 individual retirement accounts are for businesses with up to 100 employees. Employees can fund their own accounts through salary deferrals, and employers can also contribute. This plan is low-cost as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is strictly for 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 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, there may be costs and fees.
- Business 401(k) Plan — 401(k)s can be established by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans offer significant tax planning benefits for both employers and workers. They can include:
- Individual 401(k) — Also known as an i401(k), this plan has many of the same rules and benefits as 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 which may be better suited to you will be based on your business and your and your employees' needs. Different plans have different tax advantages, costs, required minimum distributions, limits on how much you can put in each year, and more. A knowledgeable financial advisor like our team 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. Peters, MO
The particular, financial-based advantages to your St. Peters, MO small business retirement plan is dependent upon which plan you set up. That said, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. 60% 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. Below are some of the main benefits for both businesses and employees of establishing a small business retirement plan:
- More confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through salary deferral
- Contributions and investment gains are not taxed until they take them out
- Over the years small contributions grow into considerable sums of money
- Ability to perform a 401(k) rollover if it's beneficial down the road
- Attract, recruit, and retain your best employees
- Promote great work ethic
- 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. Peters, MO to Assist With My Small Business Retirement Plan?
Opening small business retirement plans is not the same thing as setting up a personal account at your local St. Peters, MO bank. While the federal government does not currently obligate any business to offer a retirement plan to workers, certain states require businesses of a certain size to have a retirement plan. St. Peters, MO retirement consultants that are experienced in helping business owners create retirement plans are usually needed to not only make sure the plan is right for you, but that you abide by evolving tax and business laws.
As your St. Peters, MO retirement plan consultants for your small business, our advisers will:
- Help you elect the best plan for you, and which financial institution should hold the assets
- Assist you in establishing your plan, including adopting a written plan, establishing a trust for plan assets, helping employees understand the plan's terms, and implementing 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. Peters, 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. We work for you, and not our own firm. Request a meeting with a member of our advisor team today.
Other services we offer in St. Peters, 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. Peters, MO | Correct Capital
Owning a small business comes with a plethora of moving parts and tasks to ensure things run smoothly — navigating the complexities of 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* throughout the country. 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 through our website.
*as of January 2022