Small Business Retirement Plans in Warson Woods, MO. Setting up a retirement plan for you and your Warson Woods, 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 I want to change plans, or if I'm retiring and my business will no longer be running? Correct Capital's team of Warson Woods, MO financial planners has over 70 years of combined experience helping business owners and their employees reap the rewards of having a sound retirement plans and navigate 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 Warson Woods, 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 — This type of individual retirement account 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. The maximum contribution in a given year is 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 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 it's mainly funded by employees, and employer contributions can be deducted as a business expense.
- 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 targets how much they would like to have in retirement, 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 are a workplace savings plan that offers employees tax breaks for contributions and investment opportunities. Employees pick a percentage of their compensation to be contributed, and investments are often held in mutual funds. Most 401(k) plans offer considerable tax planning benefits for both employers and workers. They can include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also known as an Owner-Only 401(k), this plan functions similarly to a business 401(k), but only for owner-only businesses, or businesses where the only employee is a spouse. You can contribute up to the annual 401(k) limit each year, and you can contribute a set percentage of your compensation 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 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 depend on the nature of your business and your employees' needs. Different accounts have different tax breaks, fees, 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.
Benefits of Setting Up a Small Business Retirement Plan in Warson Woods, MO
The particular, financial-based advantages to your Warson Woods, MO small business retirement plan is dependent upon which plan you choose. However, a small business retirement plan, whichever one you choose, benefit employers and employees in the same way. Three out of five 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. Companies and employees will both enjoy:
Employee Benefits
- Improved confidence in their retirement planning
- Reduced taxable income
- Contributions are simple with salary deferral
- They do not pay taxes on contributions or how the money grew until they take them out
- Over the years small contributions grow into significant 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 income
- Flexible plan options to fit your plan to your needs
- Tax credits upon initial set-up
Why Should I Consult With a Financial Advisor in Warson Woods, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is not the same thing as setting up a personal savings plan at your local Warson Woods, MO bank. While the federal government does not currently obligate any employer to offer a retirement plan to workers, certain states require employers with a minimum number of employees to offer access to a retirement plan. Warson Woods, MO retirement consultants that are experienced in helping business owners establish retirement plans are usually needed to not only make sure the plan is right for you, but that you follow frequently chancing tax and business laws.
As your Warson Woods, 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 hold the assets
- Assist you in setting up 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 adapting as we need to to applicable 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 component to their continued financial health
Correct Capital's Warson Woods, MO financial planners are fiduciary advisors, meaning we are legally and ethically bound to only work in your best interest. As an independent firm, we have the freedom and flexibility to tailor our offerings to best suit the goals of our clients. Request a meeting with a member of our advisor team today.
Other services we offer in Warson Woods, 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 Warson Woods, MO | Correct Capital
Operating a small business comes with a mountain 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 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
