Broker Check


Attention Business Owners

| June 11, 2018

Is this you?

I have a small business with just a few employees, but pay a lot of taxes. I am behind on my retirement savings and my current retirement plan won’t allow me to put enough back to catch up. One of my biggest fears is my family will suffer financially if I die before I retire. I want my spouse to be comfortable for the remainder of her life and to be able to do the things that are most important to her.

Idea:  Qualified Combo Plan

Huh? A what?

In a nutshell, a combo retirement plan potentially allows a business access to large income tax deductions. The first component is a plan for your employees. A defined contribution plan such as a 401(k) profit sharing plan is used to meet the non-discrimination requirements under qualified plans and is often paid for just by your tax savings.  The second component is a plan for you, the business owner. A Split-Funded Benefit Plan, which in many cases is available solely for the business owner, will allow you to shelter up to a whopping $220,000 from your taxable income 2018. And, there may be room to get more in there if designed right. The highest design we have seen allowed $500,000 to be sheltered from one year’s taxable income. Additionally, this plan includes protection for the surviving spouse if you die before retirement.

OR is this you?

My whole life has been my business. I have not saved for retirement. My business is my retirement. My biggest fear is being sued and losing the assets I plan to fund my retirement.

Idea: Asset Leverage Financed Retirement


Put the value of your business to work for your retirement in more ways than one. This arrangement allows you to acquire a loan from a third-party lender using your assets (usually accounts receivable) as collateral for the loan. P.S.: This step usually requires the lender to file a UCC-1 statement, which protects your assets from unwanted creditors in most cases. The loan you acquire is used to purchase a life insurance policy. Once you retire, the loan is repaid with proceeds from the sale of the business. The cash value in the life insurance policy accumulates tax deferred and can be withdrawn tax-free to supplement retirement income. You can also surrender the policy for the amount of the accumulated cash value. There is just one catch. This is not a simple strategy to set up in order to take advantage of tax situations. Always consult with your Life Planner before doing anything.

OR, perhaps this is you?

I am sick paying taxes. I am burnt out. I want out, but I want my business to be my legacy for my children and/or my employees.

Idea: Tax Free Exit


Have your cake and eat it too. Sell your business, don’t pay taxes, and let the next generation take ownership without drowning in debt. That’s right. You can sell your business to your employees, and if done correctly, the proceeds can be tax free. Furthermore, you just turned your business into a tax-free entity, which will allow your employees to pay for the business with Uncle Sam’s dollars. If you have kids in the business or could in the future, this is gets even better. Again, if done correctly, you can avoid estate taxes, gift taxes and put the business in their hands at virtually no cost.

Here are just three of many planning strategies utilized to help business owners protect assets, plan for their futures, and take care of their families. What is your Life Plan missing? Not all strategies may be suitable for all business owners. These are all highly advanced plans and require tax, legal insurance, investment and holistic planning advice from your professionals before implementation. Give us a call. We’re here to help.