Timing Is Everything

30th Oct 2017

Client of the Week - Bridge Loan

The private owner of a short-term lending company is paying himself $250,000 and wants to save as much of that amount as possible yet offer a retirement plan for his staff. The business owner has three employees and his business is growing rapidly so he will likely add staff over the next few years but, like the money he lends, employees tend to turn over frequently. If he maximized contributions for himself, he wondered, how much he would have to contribute for the employees? We discussed the owner’s business expansion plans and came up with a solution. Using our  OwnersPlus™ Cash Balance Retirement Program, we paired a Safe Harbor 401(k) Profit Sharing plan with a Cash Balance plan.

The Cash Balance and Safe Harbor 401(k) Profit Sharing Plan allocates 93% of the contribution for the owner – over $245,000, for an estimated tax savings of over $100,000 each year. The Cash Balance plan has a one-year eligibility requirement and a three-year vesting schedule; new employees will not qualify to participate in the Cash Balance plan for a year, and employees who leave in under three years, will not be vested.

As we say, “It’s all in the timing!”

Dedicated DB@ DedicatedDB

Why do people fail with their personal finance? They need to change their behavior https://t.co/MhiVy0ypP2

4:41 PM 5 December 2018

Dedicated DB@ DedicatedDB

Learn how more doctors are working telecommute -- and earning side income, opening defined benefit plans https://t.co/f61djwU6el #retirement

11:21 PM 3 December 2018

Dedicated DB@ DedicatedDB

The latest Secrets of the Self-made! https://t.co/b3I1DCOZjE Thanks to @Tees_Business @vandrewattycpa @BIConline #smallbusiness #smallbiz

8:35 PM 3 December 2018

Dedicated DB@ DedicatedDB

What George H.W. Bush Leaves Behind (And Who Steps Up To Inherit) https://t.co/ftbUgz9z6O

6:38 PM 3 December 2018

Dedicated DB@ DedicatedDB

Advantages of Defined Benefit Plans for Board Directors https://t.co/4rF13gJZkA https://t.co/y1vsGE9Cat

4:33 PM 30 November 2018

Dedicated DB@ DedicatedDB

Have questions about cash balance plans? Get your free cash balance resource kit https://t.co/saniHgxnLb #retirement

11:21 PM 29 November 2018

Estimate contribution and deduction with our DB calculator Try it now

Send this to a friend