How Business Owners can Pay Less Tax and Build their Wealth

There are many ways business owners can pay less taxes, thus maximizing their wealth.

  • Make larger contributions
  • Maximize tax deductions
  • Defer Taxes on growth
  • Receive a lion share of the funds
  • Reward employees
  • Predictability of benefits in retirement

The problem is that most business owners do not effectively use retirement plans.

  • “Plain vanilla” solutions do little to maximize personal wealth.
  • Their retirement plans are mainly established to attract and retain top-tier plans. These retirement plans do NOT set up to benefit owners and do NOT provide a meaningful amount of money that owners can save.

The solution is a specialized defined benefit plan.

  • This provides a lifetime retirement benefit as well as a death benefit.
  • The owner is able to make significantly larger contributions.
  • The plan keeps pace with inflation and grows income tax free.
  • It is also protected from the claims of creditors.

A case study of two brothers (ages 51 and 44) shows the benefits of this type of plan.

  • The brother’s business has 11 employees (including themselves), and currently has a 401K plan (defined contribution plan). The solution, a specialized defined benefit plan, will tell you the current benefit at any time and will carry on towards the spouses if one of the brothers were to pass.
  • Each brother will receive retirement benefit of: $18,750 per month, which equates to a life insurance benefit of $1,875,000 each.

Year 1 Contribution Comparison (Case Study):

  • Plan type: 401K w over 50 years old catch up provision: Maximum contribution is $25,000. Tax Savings is $12,500.
  • Plan type: Specialized Defined Benefit Plan: Maximum Contribution is $9,888,847. Tax Savings is $494,424
  • Both of these plans can work together.

Want to ensure you don’t have any gaps or missed opportunities in your wealth planning? Click here to “Stress-Test” your current plan FREE.

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