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

La Crosse Business Retirement Plan Consultants

As a business owner, you want to attract the most talented employees. Offering benefits, like a fantastic retirement plan, is one of the best ways you can do just that. When you are looking for La Crosse business retirement plan consultants, go with someone with experience and the desire for you to succeed. 

Advisors Management Group understands that the best business retirement plans will make a huge difference for your staff members. 

The biggest benefits include:  

  • Tax Deduction – Employer contributions to employee retirement plans are a tax-deductible expense. 
  • Attract and Retain Employees – Lucrative and secure retirement plans will keep your business competitive in the job market.
  • Plan for Your Retirement – Business owners receive the same financial benefits from a retirement plan as the employees do. It reduces taxable income and investment earnings might even be tax-deferred.

Types of Small Business La Crosse Retirement Plans

There are two main types of small business La Crosse retirement plans – defined benefit plans and defined contribution plans. The difference between them is basically who is responsible for contributing the most to the plan. 

Defined Benefit Plans 

Commonly called a pension, defined benefit plans give employees a specific income after they retire. The amount of the income is determined by the employer. 

The employer is the only party that contributes to the investment and is completely responsible for distributing these funds to the retired employee. 

This type of La Crosse small business retirement plan isn’t offered as frequently anymore. This is because the employers carry the full responsibility for funding them and they carry more risks.

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Defined Contribution Plan

With a defined contribution plan, the employee is the one that primarily funds it. To stay competitive, many businesses will offer contribution-matching benefits up to a certain amount.

A 401(k) is the most popular type of defined contribution plan. These are very popular for employers because they carry lower risks and cost less to administer as well.

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?

The type you choose depends a lot on your company’s goals and current financial practices. Speak to a La Crosse financial consultant to talk about your plans and they will help you determine the best option.

If you want something that carries the lowest amount of risk and has the most affordable rates, then you probably want a defined contribution plan. The employee – not you – is responsible for the bulk of the funding.

Types of La Crosse Business Retirement Plans

There are four main types of La Crosse business retirement plans. Let’s look closer at them so you can decide which is best for your company.

SIMPLE IRA Plans

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

This option is best if you have fewer than 100 employees. The employees can then add funds to their plan if they made a minimum of $5,000 during the past two years and will make that much in the future, too. 

Lots of employers prefer to use SIMPLE IRAs because the setup is effortless and it doesn’t cost much to manage them.

The downside to this type of plan is that the IRS requires employers to match employee contributions dollar for dollar, up to a specific percentage.

SEP Plans

SEP stands for Simplified Employee Pension. This is one of the best options for self-employed people, freelancers, or small business owners. It is easy to set up and administer.

Anyone – even someone with just one employee – can open a SEP IRA. Unlike the SIMPLE IRA, employees do not make SEP contributions unless they want to. The employee chooses their IRA provider and where it will be invested. Then, the employer funds it.

It has pretty high contribution limits, too. Employers are 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 main disadvantage of SEP Plans is that employees are immediately 100% vested. That means employers cannot use future vesting as an incentive to retain skilled workers.

401(k) Plans

The 401(k) is named after a section of the U.S. Internal Revenue code. This is one of the most popular types of La Crosse small business retirement plan. There are two types – traditional and Roth – and the difference between them is how they are taxed.

With a traditional 401(k), employees will not be taxed on the amount they contribute to it. They are taxed when they withdraw the money.

In a Roth 401(k), employees are taxed on what they contribute, but when they withdraw it, they won’t owe any taxes on the amount. 

To be eligible for a 401 (k), your company must have at least 20 employees, so it isn’t good for micro-businesses or people who are self-employed.

Profit-Sharing Plans

As the name suggests, with a profit-sharing plan, employees can actually retain a share in the profits of the company they work for.

This is also known as a deferred-profit sharing plan, or DPSP.  This is a fantastic way for employees to feel like they are connected to the business – your success contributes to their future retirement.

The biggest downside to this kind of retirement plan is that only the employer can contribute to it. There is some flexibility; it’s legal to adjust it as needed and even contribute nothing at all some years.

Your Goals for a Retirement Plan

Before you speak to a La Crosse business retirement plan consultant, try to define your goals. This will help your consultant make the most informed suggestions that will benefit your business the most.

Some of the most common goals for a La Crosse retirement plans for small business owners are to reward, retain, and incentivize employees. When they feel like they are valued by a company and have security in their future, they are more likely to be more efficient and dedicated.

Other goals you might have include tax breaks or investing in your own retirement. Discuss all of these goals with your consultant.

Why are you considering a La Crosse business retirement plan?

Let’s look a little closer at the most common reasons that businesses set up retirement plans so you can decide which ones are the most important to you.

Tax Breaks

Contributing to a business retirement plan might lower your taxable income, which could save you money on taxes at the end of the year. How much you could save on taxes depends on the type of retirement plan and how much you contribute.

Competitive Benefits vs. Higher Pay

Another reason businesses like to offer retirement plans is that it is an affordable way to reward and retain employees. In fact, some people successfully offer competitive benefits like these retirement plans instead of increasing wages.

Save for Your Personal Retirement

This is also a wonderful way to save for your retirement. Simultaneously invest in your employees and yourself – your security matters, too.

Why is it important to know your goals when setting up a La Crosse business retirement plan?

When you are ready to schedule a discussion with a La Crosse business retirement plan consultant, it helps to have a good idea of your business’s goals, as well as how a retirement plan could impact future growth and employee investment.

If you need help identifying and refining your goals, help is here. At Advisors Management Group, we will help you define your goals more clearly so that you can choose the plan that will meet them the best.

Get in touch with a La Crosse business retirement plan consultant today. 

When you are ready to secure your retirement and invest in your business, reach out to a La Crosse financial consultant. They will break down into clear language which plans will meet your needs and help your business grow.

Call Advisors Management Group at (608) 782-0200 today.