DB plans can be an effective way to bring in additional investments. Here’s why.
21st Jul 2023
Upgrading your clients to a Defined Benefit plan can be an effective way to bring in additional investments and increase AUM.
These high-contribution retirement plans allow high income, self-employed clients to make the largest tax-deductible contributions each year, often $150,000 or more. Dedicated DB is investment-neutral, so you have complete flexibility to help your clients diversify across a selection of mutual funds, annuities, or equities with the objective of minimizing portfolio volatility – and keeping the plan on course.
What happens if the plan is overfunded or underfunded?
- Overfunding: If the balances in a plan increase sharply in a given year, the required annual contribution range the next year might be lower.
- Underfunding: If the portfolio declines sharply, the required annual contribution will need to increase in the future for the plan to stay on track.
For over 20 years, Dedicated DB’s clients have opened portfolios using various broker-dealers. The portfolio you build will depend on different variables including Interest Crediting Rate as well as the business owner’s risk tolerance and funding tolerance.
Flexible investment options and easy setup process
Our expert plan design consultants are happy to be at your side every step of the setup process. If your client is ready to save big on taxes, we’re ready to help. Call 866-269-2706 or email us at DBplans@dedicated-db.com
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