Running a small business means wearing a lot of hats. Picking the right retirement plan is often one that gets pushed to the back of the closet. But for small employers and high-income business owners, the right retirement plan strategy can do more than help employees save. It can help attract and retain talent and build long-term wealth for you as the owner.
That's where retirement plan consulting comes in.
A retirement plan consultant evaluates your business and its goals, revenue, workforce, and financial picture and helps design a retirement plan that fits your needs. It's not a one-size-fits-all exercise. A consultant asks questions like:
These answers shape which plan design makes sense, whether a straightforward 401(k), a defined benefit plan, or a combination of the two.
Many small employers default to a standard 401(k) because it's familiar. And for many businesses, that's the right call. But for high-income business owners, especially those in their 50s and 60s who are behind on retirement savings, a 401(k) alone often isn't enough to meaningfully move the needle on savings.
This is where a defined benefit plan enters the conversation. Unlike a 401(k), which caps contributions at a relatively modest annual limit, a defined benefit plan calculates contributions based on the benefit you want at retirement. For older, high-earning owners, that can mean tax-deductible contribution limits several times higher than a 401(k) alone.
Pairing a defined benefit plan with a 401(k) is a common strategy for owners who want to:
Contributions to qualified retirement plans are generally tax-deductible to the business, which helps redirect tax dollars to retirement savings while the plan is being funded. Of course, distributions from a retirement plan are taxable as ordinary income. However, a retirement plan can provide a meaningful tax deferral.
Because of the tax impact and investment options of a retirement plan, a consultant will want to involve your CPA and financial advisor in the discussions. A well-designed plan may be able to:
Retirement plans, particularly defined benefit plans, come with real compliance issues. Annual actuarial calculations, IRS filings, nondiscrimination testing, and funding requirements that need to be managed correctly to keep the plan in good standing.
This is a major reason small employers turn to retirement plan consultants rather than setting up a plan on their own. A consultant coordinates with actuaries and third-party administrators to make sure the plan stays compliant year after year, so the business owner isn't left navigating IRS rules alone.
Every business is different, which means there isn't a one-size-fits-all approach to retirement planning. At RMC Group, we work with small business owners to evaluate their financial goals, workforce, tax strategy, and long-term objectives before recommending a retirement plan. Whether you're establishing your first plan, reviewing an existing one, or exploring advanced strategies to maximize retirement savings, our team provides personalized guidance every step of the way alongside your CPA.
Our retirement planning professionals help you navigate the complexities of plan design so you can feel confident you're making decisions that benefit both your business and your employees. From traditional 401(k) plans to defined benefit plans and customized combinations, we'll help you find a strategy that supports your goals today while preparing for the future.
Ready to explore your options? Contact RMC Group to talk through the right retirement plan strategy for your business at 239-298-8210 or click here to schedule a meeting.