Small Business Retirement Plans in Weldon Spring, MO. Offering a retirement plan to your Weldon Spring, MO employees is a great way to retain talent, incentivize higher performance, and get those much-desired tax reductions. However, for most business owners, it can be difficult to know where to start. What benefits do different kinds of plans provide? 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 Weldon Spring, MO financial planners is committed to helping business owners and their employees get the most out of their retirement plans and understanding the complexity of federal regulations. For anything from initial setup and employee education to fine-tuning an existing plan, speak to a financial advisor at Correct Capital today at 877-930-4015 or contact us through our website.
What Types of Retirement Plans Are Available to Small Businesses in Weldon Spring, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. Among the most common small business retirement plans are:
- SEP-IRA — This type of individual retirement account is available to owner-only businesses, 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. The maximum contribution in a given year is 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 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. Employers can contribute 2% of an employee's paycheck, or dollar-to-dollar match an employee's contribution up to 3%.. This plan is low-cost as the set-up is fairly inexpensive.
- Personal Defined Benefit Plan — This plan is only available to owner-only businesses, or businesses 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 be subject to costs and fees.
- Business 401(k) Plan — 401(k)s are a workplace savings plan that offers tax incentives and investment opportunities. Employees may defer their salary as contributions, and employers can make annual contributions. Most 401(k) plans offer considerable tax planning advantages for both employers and employees. 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 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 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 better suited to you will depend on the nature of your business and your employees' needs. Different accounts have varying tax breaks, costs, required minimum distributions, contribution limits, and more. A prudent 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 Weldon Spring, MO
The particular, financial-based advantages to your Weldon Spring, 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. Over half of workers responded to a survey saying it 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
- More financial security in retirement
- Tax deductions
- Contributions are simple with salary deferral
- They do not pay taxes on contributions or investments gains until distributed
- Over the years small contributions grow into significant savings
- Ability to perform a 401(k) rollover if it's beneficial down the road
Business Benefits
- Attract, recruit, and retain talent
- Incentivize based on performance-based employer contributions
- 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 Weldon Spring, MO to Help With My Small Business Retirement Plan?
Setting up small business retirement plans is complicated. While the federal government does not currently require any employer to offer retirement savings options to workers, some states require employers with a minimum number of employees to have a retirement plan. Weldon Spring, MO retirement consultants that have spent years helping business owners establish 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 Weldon Spring, MO retirement plan consultants for your small business, our financial planners will:
- Help you elect the best plan for you, and the right custodian to hold plan assets
- Assist you in establishing your plan, including adopting a written plan, arranging a trust for plan assets, helping employees understand the plan's terms, and creating 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 they can use it as a part of their ongoing financial health
Correct Capital's Weldon Spring, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to do what's best for you and your employees. As an independent firm, we have the freedom and flexibility to tailor our offerings to best suit the goals of our clients. Schedule a consultation with a member of our advisor team today.
Other services we offer in Weldon Spring, MO include:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
Small Business Retirement Plans in Weldon Spring, MO | Correct Capital
Owning a small business involves a mountain 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* across the United States. 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 877-930-4015 or contact us online.
*as of January 2022
