Client Profiles

Nine Typical Client Situations

OWNER-ONLY BUSINESS

Client Objective

Maximum contribution and tax deduction

Profile

Business Strategy Consultant age 52, set up an S-Corp for his solo practice. He wants to grow his retirement assets quickly and reduce his tax liabilities. He pays himself $300,000 in W-2 income.

Solution

OnePersonPlus Defined Benefit Plan for 10 years, combined with a OnePerson (k).

Defined Benefit Only:
2018 Business Contribution:      $197,300
Tax Savings @ 37%:                    $73,000

Defined Benefit+ 401(k):
2018 Business Contribution:      $238,300
Tax Savings @ 37%:                    $88,100

Projected Defined Benefit Only Accumulation: $2.66 Million in 10 years

Learn More about OnePersonPlus

EMPLOYED WITH SIDE-INCOME

Client Objective

Reduce total tax liability

Profile

Business School Professor, age 56, makes $180,000 in salary from the University and contributes the maximum to the University’s 403 (b) plan. She also has earned at least $150,000 in sole proprietor income for the past few years from consulting and giving speeches which put her in a higher tax bracket. She plans to continue her side work until she is 62, maybe longer.

Solution

OnePersonPlus Defined Benefit Plan for 6 years based on side income

2018 Contribution: $120,000
Tax Savings on side income @ 37%: $44,400
Lower tax bracket on total income

Projected Accumulation after 6 years: $842,200
Learn More about OnePersonPlus

OWNER-ONLY, HIGH FLUCTUATING INCOME

Objective

Reduce taxes, retain flexibility

Profile

Architect, age 48, has an S-Corp and pays himself $185,000 in W-2 income in 2018. He wants to save as much as possible this year but he wants flexibility as his income fluctuates.

Solution

OnePersonPlus Defined Benefit Plan and a OnePerson (k) that he funds only in high income years

2018 Defined Benefit only Contribution: $114,800
Tax Savings@ 37%: $42,400
2018 Defined Benefit + 401(k) Contribution: $144,400
Tax Savings@ 37%: $53,400
Projected Defined Benefit Accumulation at age 62: $2.24 Million

Learn More about OnePersonPlus

SELF-EMPLOYED SPOUSE

Objective

Invest spousal income for retirement

Profile

Married couple with high household income would like to save more for retirement. Husband, is a highly paid executive at a public company; wife, age 60, has been earning $100,000 (after self-employment taxes) for the past three years in her bookkeeping practice and plans to keep working for another five years. They don’t need her income for cash flow and want to invest it.

Solution

OnePersonPlus DB Plan starting in 2018

Contribution to DB: $80,000
Tax Savings@ 37%: $29,600
Projected Defined Benefit Accumulation in 5 years: $448,500

Learn More about OnePersonPlus

MARRIED BUSINESS PARTNERS, NO EMPLOYEES

Objective

Maximize retirement savings quickly

Profile

Husband & Wife Marketing Researchers, Adam age 60,
Eva age 58, pay themselves $275,000 each in W-2 income.
They both plan to retire in 5 years.

Solution

Defined Benefit Plan with 5 years funding, optional 401(k)

OnePersonPlus Defined Benefit only
2018 Contribution: $454,000
Defined Benefit + 401(k)
2018 Contribution: $536,000
Tax Savings@ 37%: $167,900 for DB;  $198,300 for DB+401(k)
Projected Defined Benefit Accumulation after 5 years: $2.54 Million

Learn More about OnePersonPlus Defined Benefit Plans

RETIREE, EARNING BOARD FEES

Objective

Reduce current year taxes and delay Required Minimum Distributions (RMDs)

Profile

Retired executive, age 70, set up an S-corporation for his Board of Directors Fees. He pays himself $200,000 in W-2 income on about $400,000 in revenue. He needs to begin taking distributions from his other retirement plans this year, and wants to reduce his tax liability on the current year earnings.

Solution

Defined Benefit Plan for 5 years with a 3-year cliff vesting schedule. No RMDs are required from this plan until 2021.

2018 Defined Benefit Contribution: $151,700
2018 Tax Savings@ 37%: $56,100
Projected Defined Benefit Accumulation in 5 years: $843,300

Learn More about OnePersonPlus

PROFITABLE BUSINESS WITH 4 EMPLOYEES

Objective

Maximize owner contribution and tax savings while controlling cost of benefits for employees

Profile

Dentist, age 53 pays herself $275,000 from her successful Periodontal and Implant Surgery practice. She is willing to make contributions for her four employees but wants to receive the lion’s share for herself.

Solution

OwnersPlus Cash Balance Plan + Safe Harbor 401(k) Profit Sharing Plan

Age Compensation 401(k) Salary Deferral Safe Harbor/Profit Sharing Cash Balance Pay Credits Total Contribution
Dr. Forrester 53 $275,000 $24,500 $ 1,000 $ 180,800 $206,300
Yolanda 29 $35,000 $1,750 $1,250 $3,000
Stephanie 36 $45,000 $3,100 $1,250 $4,350
George 40 $45,000 $2,250 $1,250 $3,500
Maria 43 $45,000 $2,250 $1,250 $3,500

 

Total 2018 Contribution $206,300
Estimated 2018 tax savings $81,600*
Dr. Forrester will receive 93% of the OwnersPlus contribution toward her own retirement.

Learn More about OWNERSPLUS CASH BALANCE + 401(k)

LAW PARTNERS WANT FLEXIBILITY

Objective

Allow different contributions for partners with different compensation and cash flow needs

Profile

Business partners at different stages of their lives want a plan that can be tailored to meet their individual preferences.

Solution

OwnersPlus Cash Balance Plan and because there are no other employees, each owner also could set up and contribute to an optional OnePerson (k) plan

Name Age Compensation Cash Balance Pay Credits Notes
Dana 52 $275,000 $72,500 Wants to save 25% of her income.
Corey 58 $275,000 $170,000 Senior lawyer in the firm. Wants to put away $170,000.
Alan 51 $183,100 $105,000 Doesn’t need the cash flow – he can put away more than 50% of his income.
Carl 42 $275,000 $35,000 Youngest partner, has a new family, can only contribute $35,000.

Total compensation: $1,008,100
Total Cash Balance pay credits: $382,500
Total 2018 tax savings @ 38%: $141,500

Learn More about OWNERSPLUS CASH BALANCE + 401(k)

Owner-only with Fluctuating Income

Objective

Save for retirement without annual obligation

Profile

Freelance photographer, age 40 with variable income, wants to contribute intermittently – in those years that his income is high.

Solution

OnePerson(k) to which he can contribute as much as $55,000 in good years, as little as zero when he doesn’t have the cash flow.

Learn More about ONEPERSON (k)

CLIENT OF THE WEEK:

Doubting Thomas Sold!

Read More

Eligibility Checklist

Here’s a quick test to find out if OnePersonPlus is right for you.:

  • Client is 40+ years of age
  • Client typically earns at least $100,000 annually in one of these ways:
    • Is a sole practitioner or owns business with family
    • Is self-employed as primary means of earning a living
    • Has a second occupation in which client works for himself or herself
    • Is considered an Independent Contractor rather than an employee
  • Client wants to contribute more than $55,000 annually to their retirement or a higher percent of income than allowed in a 401(k) or SEP
  • Client expects to be able to make that contribution for at least three years

VIEW IDEAL CLIENT PROFILES

 

Typical Occupations

Other Typical Occupations

Architect Attorney Consultant Contractor Entrepreneur Financial Planner Graphic Designer Independent Corporate Director Independent Insurance Agent Manufacturer’s Rep Mortgage Broker Real Estate Agent Software Developer Writers

Estimate contribution and deduction with our DB calculator Try it now

Send this to a friend