Small Business Retirement Plans in University City, MO. Offering a retirement plan to your University City, MO employees is a great way to retain talent, incentivize higher performance, and get those much-desired tax reductions. 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 University City, 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 specifics of financial law. Whether you already have a plan and want insight as to how it's performing 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 Are Available to Small Businesses in University City, 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 the specifics of your business, you may open any of the following:
- SEP-IRA — A "Simplified Employee Pension" is a type of individual retirement account that is available to owner-only businesses, people who do freelance work, and businesses 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 the lessor of 25% of an employee's yearly earnings 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. Contributions are made through salary deferrals and employer contributions. This is relatively inexpensive for employers as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is only available to business with no non-owner employees, or employers with up to 5 employees. With this plan, you target a desired level of retirement income, and contribution limits are adjusted each year 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 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 employees. They can include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also called an i401(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 you can contribute a set percentage of your income 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 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 be based on your business and your and your employees' needs. Different retirement have different tax benefits, costs, required minimum distributions, maximum contributions, and more. A knowledgeable financial advisor like our team at Correct Capital will review your options and guide you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in University City, MO
The particular, financial-based benefits for your University City, MO small business retirement plan is dependent upon which plan you set up. However, a small business retirement plan, whichever one you choose, has universal benefits. 60% of employees say that a retirement plan is a "very important" factor in how good they feel at their present employment, while employers also get tax breaks and can better attract and motivate employees. Companies and employees will both enjoy:
Employee Benefits
- Better confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- They do not pay taxes on money they put in or investments gains until they take them out
- As interest accrues, small savings grow into considerable sums of money
- Ability to conduct a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Deduct your taxable income from your taxable profits
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in University City, 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 University City, MO bank. While the federal government does not currently require any business to offer retirement savings options to employees, certain states require businesses with a certain number of employees to have a retirement plan. University City, MO retirement consultants that have spent years helping business owners open retirement plans are usually needed to not only ensure you and your employees get the most out of your plan, but that you follow ever-changing tax and business laws.
As your University City, MO retirement plan consultants for your small business, our advisers will:
- Help you decide 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 adopting a written plan, establishing a trust for plan assets, helping employees understand the plan's terms, 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 component to their ongoing financial health
Correct Capital's University City, MO advisors hold ourselves to the fiduciary standard, meaning we are obligated, by law and by ethics to only work in your best interest. The only thing we sell is trust. Schedule a meeting with a member of our advisor team today.
Other services we offer in University City, MO include:
- Succession Planning
- 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
Small Business Retirement Plans in University City, MO | Correct Capital
Owning a small business involves countless daily, monthly, and annual 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 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 through our website.
*as of January 2022
