Newsletter

2018 was a stellar year for advisors who helped high income self-employed clients open Define Benefit and Cash Balance plans. These clients made significant retirement plan contributions while saving tens of thousands of dollars on taxes. Here’s what these advisors did right to close the sale:

1. THEY STARTED THE CONVERSATION EARLY

• They identified high-earning clients early instead of waiting for year-end business results.
• They used tax season to start the conversation while clients were focused on tax bills.
• They called Dedicated DB’s plan experts to help qualify clients and run custom proposals.

How to have similar success: If your clients have SEPs or 401(k)s and want to contribute more, we can help start the conversation. Call 866-269-2706 to talk about your prospecting strategy.

Sign up for our webinar, “Intro to
Defined Benefit Plans.”

2. THEY FIGURED OUT HOW HIGH-CONTRIBUTION RETIREMENT PLANS WORK UNDER NEW TAX LAWS

• They realized that the new tax law increases the value of high contribution retirement plans like Defined Benefit & Cash Balance plans, offering large “above the line” tax deductions for certain clients – like owners of S corps, partnerships and sole proprietorship’s.
• They understood that Section 199A may qualify owners of pass-through entities to take the 20% deduction by reducing taxable income below the taxable income thresholds for 2018 (Please note for 2019, the thresholds are $160,700 single and $321,400 married filing jointly).
• They knew this could provide a triple compound benefit by lowering client’s tax bracket.

How to have similar success: Identify clients with S corps, partnerships or sole proprietorships who might qualify for the deduction. Have questions? Call 866-269-2706.

See how TCJA impacts high income
self-employed business owners.

3. THEY OPENED PLANS FOR THEMSELVES

They banked on the value of these plans. That’s why 12% of our clients in 2018 were independent RIAs and CPAs who opened plans for themselves.

Example 1: A 60 year-old financial advisor in Connecticut, operating as a sole proprietor, opened a Defined Benefit plan and was able to contribute $120,000 based on an earned income of $320,000. He will accumulate $671,000 if he continues the plan for five years.

Example 2: An RIA in Texas opened a combined Cash Balance + Safe Harbor 401(k)/Profit Sharing retirement program for his firm.

Contribution for Owner = $268,000
Business Contributions for 1 Employee = $13,500
Percent of Contribution for Owner = 95%
Estimated Tax Savings for Owner = $107,000

How to have similar success: Call 866-269-2706 to see if you or your clients qualify. You can also use our Defined Benefit calculator for a tailored proposal.

Get a 2-minute proposal with our
Defined Benefit calculator

Contact Us for ALWAYS AVAILABLE Consulting

Dedicated Defined Benefit Services provides ongoing sales support and administrative services. We are investment neutral and don’t charge asset-based fees. We’re dedicated to your success.

866-269-2706 | DBPlans@dedicated-db.com