2014 in Review: Which Clients Opened Defined Benefit Plans Last Year?

12th Mar 2015

If this man runs his own business, with few employees, he needs to hear about DB Plans.

If this man runs his own business, with few employees, he needs to hear about DB Plans.

Large corporations continue to run away from DBs, but small businesspeople are discovering the huge benefits of micro Defined Benefit plans at a robust pace, particularly for the very smallest businesses. We call them the “High Income Self-Employed.” These clients are also discovering the power of doing a DB/401k combo. (See sales results below.)

The perfect business for a micro DB plan is so small — often only an owner and spouse — that many advisors underestimate their potential. They might not be HNW today but, as they get past 40 and really start making money, with a little help from you they can turn that high income into wealth. How quickly? Very: Because they are eligible for “business” defined benefit plans, this year our clients contributed an average of $129,000 of new money to their retirement savings. These are new assets for you to manage – all of it deductible according to the IRS.

In March and April, your high income clients who did not implement such aggressive tax strategies will face significant tax liability for 2014. This “tax payment shock” will open their minds to new ideas to avoid similar pain for 2015. Get ready for that conversation: Learn more about the clients who could benefit.

DDB Sales Highlight #1: The Attraction of the Combo Plan

In addition to the first-year DB contributions of $129,000, 30% of our DB clients also will be contributing $20,000-$35,000 to one-person 401(k) plans! The combo has two key advantages:

  1. For clients who want to MAXIMIZE contributions, along with the Defined Benefit plan they can also set up a 401(k) and contribute an additional $39,900. This is in addition to the huge contributions to the DB plan.
  2. For clients who have fluctuating incomes, they can lower their required annual contribution to the defined benefit plan but add up to $39,000 in higher income years by contributing to the 401(k).

DDB Sales Highlight #2: Occupations

Once again, we find an interesting diversity of occupations among our mutual clients. Independent consultants and medical professionals opened the most plans with 18% and 17% of sales respectively. Another 16 % of our clients are in finance: Financial Advisors, CPAs, or Insurance Agents who adopted plans for themselves.

Please call us at 866-269-2706 about your situation. Do you think 2015 might be your year to book a micro-DB plan or two? 

Click here to see the full results and list of occupations.

Together we’ll meet your clients’ needs and exceed their expectations.

We will do everything we can to help you bring in DB sales in 2015. Call us toll free at: 1-866-269-2706 or email us at dbplans@dedicated-db.com.

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