Small Business Retirement Plans in Wentzville, MO. Starting up a retirement plan for you and your Wentzville, MO employees is a great way to retain talent, incentivize higher performance, and get those much-needed 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 that apply to different plans? What happens when a new plan seems like a better option, or if I'm closing my business? Correct Capital's team of Wentzville, MO financial planners has over 70 years of combined experience helping business owners and their employees get the most out of their retirement plans and navigate the complexity of financial law. For anything from initial setup and employee education to fine-tuning an existing plan, call Correct Capital today at 314-930-4015 or contact us online.
What Types of Retirement Plans Are Available to Small Businesses in Wentzville, MO?
The federal government 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 — 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. Contributions are limited to 25% of an employee's yearly earnings or $66,000 (as of 2023), whichever is less. Employers can deduct contributions they make on behalf of their employees.
- 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 reserved for business with no non-owner employees, or those with up to 5 employees. With this plan, you target how much they would like to have in retirement, and contribution limits are modified annually 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, you will be subject to 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 come with significant 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 One-Participant 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. You can contribute up to the annual 401(k) limit each year, and the employer may make a nonelective contribution up to 25% of compensation 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 "best" for you will be based on the nature of your business and your employees' needs. Different accounts have different tax benefits, fees, required minimum distributions, contribution limits, and more. A reputed financial advisor like ours here at Correct Capital will review your options and aid you in choosing the best retirement plan for your small business.
Why You Should Set Up a Small Business Retirement Plan in Wentzville, MO
The specific, financial-based benefits for your Wentzville, 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. Over half of employees say that a retirement plan is a "very important" factor in job satisfaction, while employers reap the benefits both during tax season and in office productivity. Companies and employees will both enjoy:
Employee Benefits
- Better confidence in their retirement planning
- Tax deductions
- Contributions are simple with payroll deductions
- They do not pay taxes on contributions or how the money grew until distributed
- Over the years small savings grow into significant sums of money
- Ability to perform a 401(k) rollover if they change employers
Business Benefits
- Attract, recruit, and retain talent
- Incentivize based on performance-based employer contributions
- 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 Wentzville, MO to Help 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 Wentzville, MO bank. While the federal government does not currently require any employer to offer a retirement plan to workers, certain states require businesses of a certain size to have a retirement plan. Wentzville, MO retirement consultants that have spent years helping business owners establish retirement plans are usually needed to not only ensure you get the benefits you're looking for, but that you follow evolving tax and business laws.
As your Wentzville, MO retirement plan consultants for your small business, our team will:
- Help you decide the "right" plan for you, and the right custodian to hold plan 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 developing a record keeping system
- Help you operate your plan by keeping up-to-date with relevant 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 important aspect of their ongoing financial success
Correct Capital's Wentzville, MO financial planners are fiduciary advisors, meaning we are legally and ethically obligated to only offer advice based on what we believe is 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 Wentzville, 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 Wentzville, MO | Correct Capital
Owning a small business comes with a plethora of daily, monthly, and annual tasks to ensure things run smoothly — setting up and maintaining 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* nationwide. 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 314-930-4015 or contact us online.
*as of January 2022
