Small Business Retirement Plans in Webster Groves, MO. Setting up a retirement plan for you and your Webster Groves, 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 are the different laws I'll 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 Webster Groves, MO financial planners is committed to helping business owners and their employees reap the benefits of having a sound retirement plans and understanding the specifics of federal regulations. Whether you're interested in modifying an existing plan or are looking to create an entirely new one, call Correct Capital today at 314-930-401K or contact us online.
What Types of Retirement Plans Can Small Businesses Open in Webster Groves, 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 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 business with no non-owner employees, or those with very few employees. It follows the same rules as a traditional IRA, where the money put into the account grows tax-deferred. The maximum contribution in a given year is 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 employees as to their own, however the contributions are tax-deductible.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these individual retirement accounts are often thought of 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 plan is low-cost as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is strictly for business with no non-owner employees, 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 adjusted 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 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 companies and workers. Common types of 401(k) plans include:
- Traditional 401(k)s
- Profit-sharing plans
- Safe Harbor 401(k)s
- Automatic enrollment 401(k)s
- Individual 401(k) — Also referred to as a Solo 401(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. You can contribute up to the annual 401(k) limit each year, and the employer may make a nonelective contribution up to 25% of 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 advantages and drawbacks, and there's no telling what's "best" for you without knowing your specific situation. Different accounts have different tax breaks, expenses, required minimum distributions, maximum contributions, and more. A reputed financial advisor like those 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 Webster Groves, MO
The particular, financial-based advantages to your Webster Groves, MO small business retirement plan will largely be based on the specific plan you choose. That said, there are many general benefits of setting up a small business retirement plan for both businesses and workers. Three out of five employees 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:
Employee Benefits
- Improved financial security in retirement
- Tax deductions
- Contributions are simple with salary deferral
- They do not pay taxes on money they put in or investments gains until distributed
- As interest accrues, small contributions grow into significant sums of money
- Ability to perform a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain your best employees
- Incentivize based on performance-based employer contributions
- Deduct your taxable income from your taxable income
- Highly customized plans are available
- Tax credits upon initial set-up
Why Should I Consult With a Financial Advisor in Webster Groves, 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 business to offer retirement savings options to employees, some states require businesses with a minimum number of employees to have a retirement plan. Webster Groves, 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 ever-changing tax and business laws.
As your Webster Groves, MO retirement plan consultants for your small business, our team will:
- Help you choose which plan works best for you and your employees, and the right custodian to hold plan assets
- Assist you in establishing your plan, including adopting a written plan, establishing a trust for plan assets, helping employees understand how specific of the plan apply to their retirement, and developing 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 it can serve as a part of their ongoing financial success
Correct Capital's Webster Groves, MO advisors hold ourselves to the fiduciary standard, meaning we are legally and ethically bound to only offer advice based on what we believe is 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 Webster Groves, 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 Webster Groves, MO | Correct Capital
Owning 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* nationwide. To set up a retirement plan for your small business, or learn what other services we offer to 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
