Are You Self Employed? Planning on Making a High Income in 2017?

Well, you may not want to contribute yet to your SEP or SIMPLE IRA for 2017 if you have one of these plans.  Why?  You may not be able to open a Defined Benefit or Cash Balance Plan for 2017 if you do.

Owner only businesses or those with just a few employees can usually sock away more dollars in a DB plan or Cash Balance plan, helping you save more for your retirement and potentially save more in current year income taxes.  Contact us if you’d like us to perform an analysis to see if either of those plans or other options may be better suited to your circumstances.

Here are a couple of examples:

In 2016, a self-employed consultant age 52 paid herself $300,000 in W-2 income from her S-corp. to maximize her tax and retirement savings.  She contributed $182,000 to a defined benefit plan which is 3 times the $59,000 that she could have contributed to a SEP. ¹

If you’d like to see the numbers behind this in more detail contact us or tell us a little more about your business and we can provide you a free report outlining your self-employed retirement planning options, highlighting the different contribution amounts and the potential tax savings you might achieve. Click the button below to get started.

Free Report

A small medical practice owned by Dr. Smith, age 62, with 4 additional employees, can establish a Cash Balance defined benefit plan alongside a 401(k) plan.  Dr. Smith can contribute $300,350 for himself, more than 96% of the total contribution.  If Dr. Smith were to stay with his SIMPLE, his own contribution would be limited to $23,450.²

Partnerships, S-Corps, and other business entities with strong consistent cash flow can establish a Cash Balance Plan plus a Safe Harbor 401k Profit Sharing Plan to make large, tax-deferred contributions for the owners while limiting and controlling the cost of retirement benefits for employees.³

If you’d like to see the numbers behind this in more detail contact us or tell us a little more about your business and we can provide you a free report outlining your self-employed retirement planning options, highlighting the different contribution amounts and the potential tax savings you might achieve. Click the button below to get started.

Free Report

^{1, 2, 3 © Dedicated Defined Benefit Services,  used with permission.}

^{This information is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.}

^{Defined benefit plans may be appropriate for businesses with consistent revenues for long-term funding where owners are older and earn more than the average employee. These types of plans have additional costs and generally involve engagement of an actuarial firm for plan administration.}