Small Business Retirement Plans in Wildwood, MO. Offering a retirement plan to your Wildwood, MO employees offers a variety of benefits, including tax reductions and a great way to attract and retain your highest-performing workers. While the benefits may be obvious, the difficulties of establishing and maintaining small business retirement plans are not. What benefits do different kinds of plans provide? 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 Wildwood, 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 financial law. Whether you already have a plan and want insight as to how it's performing or need to set up a plan, speak to a financial advisor at Correct Capital today at 314-930-401K or contact us through our website.
What Types of Retirement Plans Can Small Businesses Open in Wildwood, MO?
Types of retirement plans vary; some only apply to businesses of a certain size, while some differ other areas such as employer contributions. Depending on the specifics of your business, you may open any of the following:
- SEP-IRA — This kind of individual retirement account is available to owner-only businesses, freelancers, and businesses 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 can deduct contributions they make on behalf of their employees.
- SIMPLE IRA — "SIMPLE" stands for "Savings Investment Match Plan for Employees," and these IRAs are for businesses with up to 100 employees. Employers can contribute 2% of an employee's compensation, or dollar-to-dollar match an employee's contribution up to 3%.. This is relatively inexpensive for employers as employees usually make the majority of the contribution, and employer contributions can be deducted as a business expense.
- Personal Defined Benefit Plan — This plan is only available to owner-only businesses, or businesses with up to 5 employees. With this plan, an employee targets a desired level of retirement income, and contribution limits are adjusted each year based on that, with a maximum limit set each year. While this plan is highly customizable and allows for significant contributions, there may be annual fees.
- Business 401(k) Plan — 401(k)s can be opened by private companies of any size, and are highly customizable. There are annual contribution limits. Most 401(k) plans offer considerable tax planning benefits for both businesses 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 known as an i401(k), this plan is aimed at offering similar benefits 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 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 it's impossible to say which is "best" for you without knowing your specific situation. Different plans have varying tax advantages, costs, required minimum distributions, contribution limits, and more. An experienced 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 Wildwood, MO
The specific, financial-based benefits for your Wildwood, MO small business retirement plan will largely be based on the specific plan you set up. However, there are many general benefits of setting up a small business retirement plan for both businesses and workers. 60% of employees 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. Below are some of the main benefits for both businesses and employees of having a small business retirement plan:
- Improved confidence in their retirement planning
- Tax deductions
- Contributions can be easily made through payroll deductions
- Contributions and investment gains are not taxed until they take them out
- As interest accrues, small savings grow into significant savings
- Ability to perform a 401(k) rollover if they change employers
- Attract, recruit, and retain your best employees
- Promote great work ethic
- Deduct your taxable income from your taxable income
- Highly customized plans are available
- Tax credits upon initial set-up
Do I Need a Financial Advisor in Wildwood, MO to Assist With My Small Business Retirement Plan?
Setting up small business retirement plans is complicated. While the federal government does not currently require any company to offer retirement savings options to employees, certain states require employers with a minimum number of employees to have a retirement plan. Wildwood, MO retirement consultants that are experienced in helping business owners open retirement plans are usually needed to not only make sure you and your employees get the most out of your plan, but that you follow frequently chancing tax and business laws.
As your Wildwood, MO retirement plan consultants for your small business, our team will:
- Help you choose the "right" plan for you, and the right custodian to hold plan assets
- Assist you in setting up your plan, including creating a document that complies with IRS code, establishing a trust for plan assets, helping employees understand how specific of the plan apply to their savings, and creating a record keeping system
- Help you operate your plan by staying compliant 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 important aspect of their ongoing financial journey
Correct Capital's Wildwood, MO financial planners are fiduciary advisors, meaning we are legally and ethically bound 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. Request a meeting with a member of our advisor team today.
Other services we offer in Wildwood, MO include:
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
- Retirement Planning
- Rollover 401(k)
- Wealth Management
- 401k Companies
Small Business Retirement Plans in Wildwood, MO | Correct Capital
Owning a small business involves a plethora 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 in both small and large companies, and represents over $230 million in total plan assets* throughout the country. 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