We partner with financial advisors who provide financial and tax consulting for farmers. In the past, these farmers have invested heavily in equipment to take advantage of tax deductions but have been slow to build up retirement savings. Defined benefit and cash balance plans allow them to quickly accumulate retirement wealth and take advantage of large tax deductions.
A farmer, age 58, wants to retire in 5 years. He has a multi-million-dollar stockpile of grain that he can sell over the course of 5 years.
Working together with his CPA and financial advisor, Dedicated DB ran scenarios at different compensation levels to help them figure out how much grain to sell, taking into account his other deductions, etc. to arrive at his desired $200,000 annual contribution level. We opened a OnePersonPlus defined benefit plan for him and a OnePerson (k) with optional contributions:
A family farm has four owners: the parents in their 60’s and their two sons, in their 30’s, who will increasingly take over management of the chicken farm. There is one additional full time employee.
Dedicated DB set up an OwnersPlus Cash Balance + Safe Harbor 401(k)/Profit Sharing Plan that will allow the parents to fund their retirement and diversify their assets.
Parents: $216,000 each
Sons: $203,000 each
99% of contribution going to Family
Estimated Tax savings @38%: $143,600
Send this to a friend