People Followed Their Passions During the Pandemic
29th Jun 2021
- Nearly 4.3 million new business applications were filed in 2020, almost 1 million more than in 2019, according to data from the U.S. Census Bureau.
- A Defined Benefit plan can help small business owners accelerate retirement savings and lower taxes liabilities.
- One of our clients, a 57-year-old product manager who earns $180,000 a year, started making soaps and candles on the side. She made $150,000 in revenue with her side hustle but saved $53,000 in taxes by opening by a Defined Benefit plan.
The COVID-19 pandemic has affected the U.S. economy by shuttering small businesses and leaving millions of workers jobless. While the economy has faltered, there’s been a surge in entrepreneurship.
A growing number of people realized that they wanted to pursue their passion and left their day jobs, prompting a jump in entrepreneurship to levels not seen in 15 years. Nearly 4.3 million new business applications were filed in 2020, almost 1 million more than in 2019, according to data from the U.S. Census Bureau. The influx of new businesses were mostly created by women and people of color, according to a survey from payroll and benefit’s provider Gusto.
Our job at Dedicated Defined Benefit Services is to help high earning entrepreneurs and small business owners save on taxes while building wealth for retirement. We have experienced a whirlwind of small business owners opening Defined Benefit plans who started successful side hustles since the pandemic.
Pursuing Passions During the Pandemic
Fiona Loh, 28, started a side hustle during the pandemic baking cookies, as she felt there was a need for home-baked goods. Loh was working 20 hours a day at her full-time banking job and baking cookies on the side. She finally left her day job to deliver “happiness one cookie embrace at a time” and recently moved the baking business out of her parents’ home to a commercial kitchen.
After the pandemic hit, sisters Angela Muhwezi-Hall and Deborah Gladney quit their jobs to launch a hiring platform, called QuickHire, to help service industry and skilled trade workers obtain jobs in Wichita, Kansas. The app, set up like a dating app, connects job seekers with open positions to be drivers, grocers, packers or manufacturers. “There were certainly concerns launching during a pandemic, but there was an opportunity, too,” Gladney said to Kansas.com. “Companies had to pivot, and so did people.”
Tax-advantaged Retirement Plan for Small Business Owners
The surge in small business owners means a greater need for retirement planning strategies for high income, self-employed professionals. A Defined Benefit plan can help small business owners accelerate retirement savings and lower taxes liabilities. This tax-advantaged plan allows for big contributions that are fully tax deductible. See how much you can save in taxes.
Side Hustle Leads to Wealth and Tax Savings
A product manager, 57, who earns $180,000 at a tech company in Silicon Valley, started making soap and shampoo for her friends at the beginning of the pandemic. The products were so popular, she decided to start selling them on an e-commerce site and earned $150,000 in revenue the first year. By opening a Defined Benefit plan, she contributed $143,300 and saved $53,000 in taxes. In six years, when she plans to retire from making soaps, she will have accumulated $818,200.
Here’s how to get started with opening a Defined Benefit plan.