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One of the La Crosse business retirement plan consultants calculating the best plan for a small business.

Eau Claire Business Retirement Plans

One of the best ways for your business to grow is to employ talented and dedicated employees. The best way to do that is to offer fantastic retirement plans. If you are looking for Eau Claire business retirement plan consultants, go with someone with experience and the desire for you to succeed. 

Advisors Management Group knows that finding business retirement plans that meet your needs has a noticeable impact on business growth. 

Some of the benefits of business retirement plans include:  

  • Tax Deduction – When an employer contributes to employee retirement plans, this is a tax-deductible expense. 
  • Attract and Retain Employees – Desirable retirement plans will keep your business competitive in the job market.
  • Plan for Your Retirement – Eau Claire business owner retirement plans give the same financial benefits as the employees. It reduces taxable income and investment earnings might even be tax-deferred, too.

Types of Plans

As you look at plans, you will notice that there are two types – defined benefit plans and defined contribution plans. The main difference between them is who is responsible for contributing the most: the employee or the employer. 

Defined Benefit Plans 

Defined benefit plans are also called pensions. With a defined benefit plan, an employee will receive a set amount of income after they retire. The amount they receive is determined by the employer. 

The only person that contributes to this benefit plan is the employer. They are solely responsible for the distribution of these funds as well. 

This type of plan isn’t as popular as it used to be, mostly because in this Eau Claire retirement plan for businesses, the business owner carries the full responsibility for funding them.

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Defined Contribution Plan

On the flip side, the employee is the one that primarily funds a defined contribution plan. Even though they don’t have to, lots of businesses will offer contribution-matching benefits up to a certain amount. 

The most popular type of plan of this type is a 401(k). These are very common because they carry lower risks for employers and cost less to administer. 

Types of Defined Contribution Plans

  • 401(k) plans
  • Profit-sharing plans 
  • Money purchase plans
  • Employee stock ownership plans

Should my business use a defined benefit plan or defined contribution plan? 

To decide whether to offer a defined benefit plan or a defined contribution plan, you should talk to an Eau Claire financial consultant. They will listen to your concerns and suggest the best one for your business. 

The defined contribution plan is more affordable and carries less risk. The employee is the one responsible for most of the funding, making it one of the most popular types of Eau Claire business retirement plans.

Types of Eau Claire Business Retirement Plans

There are four main types of Eau Claire business retirement plans. Here is a closer look at each.

SIMPLE IRA Plans

The SIMPLE IRA may be best for very small businesses. 

SIMPLE IRA stands for Savings Incentive Match Plan For Employees Individual Retirement Accounts. 

Only small businesses with 100 employees or fewer qualify. Employees are eligible to add funds if they earned at least $5,000 during the previous two years and will earn at least that much in the upcoming year as well. 

Setting up a SIMPLE IRA is pretty easy and it doesn’t cost much to manage them, either.  Your Eau Claire business retirement plan consultant will thoroughly discuss costs with you before you make your final decision. 

The biggest drawback to it is that the IRS requires employers to match employee contributions dollar for dollar up to a specific percentage. 

SEP Plans

A Simplified Employee Pension (SEP) is the best choice for self-employed, freelancers, or businesses with 10 employees or fewer. 

This option is completely funded by the employer, but employees have the option to add funds to it. After the employee chooses the IRA provider, the employer begins to fund it. 

In this Eau Clarie retirement plan for businesses, the business owner is allowed to contribute up to 25% of the eligible employee’s gross annual salary. If they are self-employed, they may contribute up to 20% of their net adjusted annual self-employment income.

The biggest disadvantage to this plan is that employees become 100% vested almost immediately. So if you are a small business owner that prefers to use future vesting as an incentive, this may not be the best option for you. 

401(k) Plans

The most popular choice on this list is the 401(k). It got its name from a specific section of the U.S. Internal Revenue code. There are two types that you can choose from – traditional and Roth. 

Employees are not taxed on the amount they contribute to a traditional 401(k). They only have to pay taxes when they withdraw funds from it. 

With a Roth, employees pay taxes on their current contributions. When they withdraw from it in the future, they won’t owe taxes. 

This type of retirement plan is best if you have at least 20 employees. 

Profit-Sharing Plans

Some businesses offer this as an add-on while some supply it as the only retirement benefit. With this plan, employees retain a share of the business’s profits when they retire. 

Also known as a deferred-profit sharing plan (DPSP), this is a way for employees to feel personally invested in the success of the company.

The biggest drawback to it is that only the employer can contribute to it. There is some flexibility allowed with it, however. It’s legal to adjust it as needed and even contribute nothing at all for certain years. 

Your Goals for a Retirement Plan

It is very important for you to understand your goals before you speak to an Eau Claire financial consultant. This way, the consultant will be more successful at pinpointing plans that will benefit your business the most. 

One of the most common goals for implementing business retirement plans is to reward and incentivize employees. When skilled workers feel like they are directly contributing to their own future, they are more likely to be more focused and efficient. 

Other goals might also be the tax breaks and investing in your own retirement. Call (715) 834-9512 to schedule a discussion with an Eau Claire business retirement plan consultant. 

Why are you considering an Eau Claire business retirement plan? 

It might just be all three of the following reasons. Let’s look a bit closer at them. 

Tax Breaks

When a business owner contributes funds to business retirement plans, it may lower their taxable income. This might then save you money on taxes. 

The amount you could save depends on the type of retirement plan and how much you contributed to it.

Competitive Benefits vs. Higher Pay

Offering competitive benefits like a lucrative retirement plan might be more affordable than increasing pay. 

This is a desirable way to retain employees and attract skilled workers too. 

Save for Your Personal Retirement

With Eau Claire retirement planning and wealth management, you can rest assured it is a good way to save for your retirement. Add funds to your own retirement accounts while you are adding funds to your employees’. It’s a smart way to increase your wealth in the future and add more security, too. 

Why is it important to know your goals when setting up an Eau Claire business retirement plan?

Each plan has its own nuances and benefits. They can impact your bottom line, employee satisfaction, or your personal future in unique ways. 

At Advisors Management Group, we will help you narrow down your goals so that you can choose the plan that will meet them the best. 

Get in touch with an Eau Claire business retirement plan consultant today.  

Are you ready to make a lasting impact on your small business that will help it grow? Contact an Eau Claire financial consultant today. 

They will help you define each business retirement plan and find one that does the most good for your business.