Lessons Learned from 2017

9th Feb 2018

Lessons for 2018

WHAT WE LEARNED IN 2017

2017 was a record-breaking year for our IRS-approved Defined Benefit and Cash Balance plans. High-Income Self Employed (HISE) individuals and Small Business Owners (SBOs) rushed to open plans by year end. The reason is simple — these plans continue to offer the highest tax-deductible savings allowed. Overall, at Dedicated DB, demand for these plans grew year over year by 24%.

Our OwnersPlus Cash Balance +401(k) Retirement Program for very small businesses (2-10 participants) were particularly popular because they maximize tax savings, offer large retirement contributions, averaging $225,000, and in some cases, add a benefit for valued employees.

With that summary, here are three key lessons learned in 2017…

calendarLESSON #1 

DON’T WAIT UNTIL OCTOBER

If you or your client expect to have high income in 2018, start thinking about Cash Balance plans right now. This makes sense for a few reasons:

  • These plans offer amazing benefits, BUT they are not a cookie cutter solution. It takes time to design the perfect plan. The earlier we start the conversation the better.
  • As a result of the new tax law, many business owners will be talking to their CPAs about whether to change business entities to take advantage of corporate rate decreases and pass through deductions. Make yourself part of that conversation by adding the retirement plan strategy.
START BY RUNNING AN ILLUSTRATION

or call us: 1-866-269-2706

Important Tip: The deadline for opening a Safe Harbor plan is 9/30/18. In most cases, we combine a Safe Harbor 401(k)/profit sharing plan with a Cash Balance plan to limit the overall contribution for employees and increase the contribution for owners. If you wait until October to talk to clients about year-end tax strategies, they will miss out on savings for 2018.

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LESSON #2

No SEP or SIMPLE Contributions

Often, these Defined Contribution plan documents do not allow simultaneous contributions to other plans which prevents many clients from being able to take advantage of the added savings of a Defined Benefit or Cash Balance plan in the current year.

See how Defined Benefit and Cash Balance Plans favorably compare to other retirement plan options.

COMPARE PLANS

Important Tip: Although we write about this every year, come November and December, some advisors and their clients end up disappointed.

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people networkLESSON #3

Find Prospects in Your Virtual Community

In 2017, we helped numerous e-commerce business owners, software developers, YouTube stars, content creators, and other online entrepreneurs open plans for themselves.Many of them found us online and called directly, without an advisor. Look around your community – virtual and otherwise – to identify prospects. They may be earning $200,000+ without the expenses of a retail presence and could benefit from your investment advice.

Call us today to talk about your prospecting strategy and how we can work together to help you identify these individuals.

1-866-269-2706

CONTACT US

Important Tip: Many non-traditional high income earners aren’t being approached by the financial community, yet they represent a huge opportunity. Using the internet to find these individuals is a good prospecting strategy.

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LEARN MORE IN A WEBINAR

Join us for our regularly scheduled weekly webinar. Learn the basics of defined benefit plans for your small business and self-employed clients.

JOIN A WEBINAR

LOOKING FORWARD…

We’ve already talked to many of you this year. For those of you who haven’t called, let’s talk early so we can lock down a strategy that helps you get more assets under management and your client the maximum tax and retirement savings. We look forward to working with you in 2018.

CONTACT US FOR ALWAYS AVAILABLE CONSULTING

Dedicated Defined Benefit Services provides ongoing sales support and administrative services. We are investment neutral and do not charge asset-based fees. We are here to help.

You provide the investments and money management.

PHONE: 866-269-2706

CONTACT US

 

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