A Tax Strategy for High Income Self-Employed and Small Practice Owners Defined Benefit Plans for Medical Professionals.

Slides:



Advertisements
Similar presentations
In (4/08) AXA Advisors, LLCFor presentation to financial professionals only 1 Give Your Self-Employed & Small Business Clients a xxx Presentation:
Advertisements

A Tax Strategy for Individuals with Self-Employment Income and Owners of 1-5 Person Companies Defined Benefit Plans for Small Business Owners Copyright.
A Tax Strategy for Individuals with Self-Employment Income and Small Business Owners Defined Benefit Plans for Small Business Owners Copyright 2014 Dedicated.
Copyright ©2004 Pearson Education, Inc. All rights reserved. Chapter 19 Retirement Planning.
Building a Retirement Program for Business Presented by (Name, CPA) Member, The Ohio Society of CPAs 5/3/
CHAPTER 11-SAVING AND INVESTING OPTIONS 11-2 Medium-Risk Choices.
Defined Benefit Pension Plan Chapter 14 Employee Benefit & Retirement Planning Copyright 2009, The National Underwriter Company1 What is it? A qualified.
Simplified Employee Pension Chapter 24 Employee Benefit & Retirement Planning Copyright 2009, The National Underwriter Company1 What is it? A Simplified.
1 Personal Financial Planning Chapter 1, Financial Planning Process.
1 Personal Financial Planning. 2 Investing for Retirement Will you be able to retire? –When? –At what standard of living? –How much will you need to retire?
Selecting the Appropriate Retirement Plan Qualified Retirement Plans Why Have a Plan? » Help attract and retain employees » Helps the owner and.
The Small Business Pension Program A Defined Benefit Retirement Plan Program for Businesses with One to Five Employees.
1 Section 79 Plans with SecurePlus Advantage 79 TAX-ADVANTAGED LIFE INSURANCE FOR BUSINESS OWNERS AND EMPLOYEES TC42529(0808) This information is not intended.
1 Retirement Planning and Employee Benefits for Financial Planners Chapter 9: IRAs and SEPs.
A Tax Strategy for Individuals with Self-Employment Income and Owners of 1-5 Person Companies Defined Benefit Plans for Small Business Owners.
Academic & Administrative Pension and Benefit Plans Realize. It starts with you. Annual General Meeting for Members of the Academic and Administrative.
Solid Finances Sponsor This program is made possible by a grant from the FINRA Investor Education Foundation through a partnership with United Way Worldwide.
©2015, College for Financial Planning, all rights reserved. Session 8 SIMPLEs and SEPs CERTIFIED FINANCIAL PLANNER CERTIFICATION PROFESSIONAL EDUCATION.
Making the Most of Your District’s 403(b) Plan. General Information Only Please be aware that this information is intended to be general in nature and.
Copyright  2002 by Harcourt, Inc. All rights reserved. CHAPTER 14: MEETING RETIREMENT GOALS Clip Art  2001 Microsoft Corporation. All rights reserved.
Preliminary Concerns Chapter 3 Planning for Retirement Needs.
Your Retirement Your Retirement: Plan Today. Play Tomorrow About this presentation: This presentation includes the following plan: FedEx Kinko’s.
Increasing contributions presentation Increasing contributions in your retirement plan account.
A Tax Strategy for High Income Self-Employed and Small Businesses Owners Defined Benefit Plans for Small Business Owners.
Module 30 Retirement Planning. Menu The need for retirement planning Tax deferral and retirement planning Qualification of pension plans Other retirement.
SEP-IRA vs. Solo 401K (also called: Self-Employed 401K or Individual 401K) vs. Simple IRA Jojo Zhou, Jane Fu, Ying Lin & Anna Li’s SMD team Training only.
Chapter 19 Retirement Planning.
Dr. Steven M. Hays BKHS Personal Finance 1. Objectives  Describe the role of Social Security  Explain the difference between defined- benefit and defined-contribution.
The UBS Small Business Pension Program Year-End Training Event, November 1, 2005 Presented By: EMJAY Retirement Plan Services.
SEP-IRA vs. Solo 401K (also called: Self-Employed 401K or Individual 401K) For Anna Li’s team members Internal training use only.
CHAPTER 14: MEETING RETIREMENT GOALS 14-2 Pitfalls in Retirement Planning  Starting too late.  Putting away too little.  Investing too conservatively.
1 Copyright 2013 Dedicated Defined Benefit Services LLC Advantages of Micro Defined Benefit Plans A 2013 Tax Strategy for High Income Professionals, Small.
TACOMA EMPLOYES' RETIREMENT SYSTEM. 2 Orientation Outline I Sources of Retirement Income II How the Plan Is Funded and Managed III Service Retirement.
A Tax Strategy for Individuals with Self-Employment Income and Small Practice Owners Defined Benefit Plans for Medical Professionals.
Retirement Plan Funding Dynamics: How Retirement Plan Variables Affect Funding Outcomes Jack Lawless, CPA, APM Pension Strategies, LLC DFW FPA Platinum.
Retirement Savings and Deferred Compensation
Basic Investing 401(k) Plan A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions.
Hicks Pension Services Presented by Presented by Eric Petersen Eric Petersen Pension Consultant Pension Consultant.
Medical expense plan for Washington State employees in general government agencies and higher education institutions.
By identifying specific financial goals, there’s a much better chance that clients will commit to invest.
Designing the Right Retirement Plan Chapter 1 Employee Benefit & Retirement Planning Copyright 2009, The National Underwriter Company1 Gather relevant.
Pension Information Pension Information Committee July 27, 2006 BCECS Inc. November 13, 2007.
© 2009, Kravitz Inc. All rights reserved. Greater Tax Deferral using Cash Balance Plans.
HR 10 (Keogh) Plan Chapter 22 Employee Benefit & Retirement Planning Copyright 2009, The National Underwriter Company1 What is it? a qualified retirement.
A Tax Strategy for Individuals with Self-Employment Income and Small Business Owners Defined Benefit Plans for Medical Professionals.
PERSONAL INVESTMENTS HELPING YOUR CLIENTS REACH THEIR GOALS.
Big Tax Savings with Retirement Plans Presented by: Eric Petersen Hicks Pension Services.
Profit Sharing Plan The information contained in this document is not for use or disclosure outside Makotek, LLC.
Defined Benefit Plans for Small Business Owners Give Your Self-Employed & Small Business Clients a Presenting…
A Tax Strategy for Individuals with Self-Employment Income and Small Business Owners Defined Benefit Plans for Small Business Owners Presentation for CPAs.
Saving for Retirement Personal Finance Chapter 15.2.
Retirement Planning Social Security Social Security is a federal program that taxes you during your working years and uses the funds to make payments.
Please be aware that this information is intended to be general in nature and is not intended to be legal or tax advice. Each of you should follow up.
National Life Insurance Company ® | Life Insurance Company of the Southwest TM National Life Insurance Company ® | Life Insurance Company of the Southwest.
How to Save for Retirement When You’re Self-Employed.
A STEP-BY-STEP APPROACH TO INVESTING. By identifying specific financial goals, there’s a much better chance that clients will commit to invest.
Defined Benefit Plans for Medical Professionals
Defined Benefit Plans for Medical Professionals and Successful Business Owners A Tax Strategy for Individuals with Self-Employment Income and Small Business.
Presentation for CPAs Copyright 2017 Dedicated Defined Benefit Services, LLC. OnePersonPlus is a registered trademark of Dedicated Defined Benefit Services,
Defined Benefit Plans for Medical Professionals
Presentation for CPAs Copyright 2018 Dedicated Defined Benefit Services, an Ascensus company OnePersonPlus is a registered trademark of Dedicated Defined.
Defined Benefit Plans for Small Business Owners
Defined Benefit Plans for Small Business Owners
Presentation for CPAs Copyright 2017 Dedicated Defined Benefit Services, LLC. OnePersonPlus is a registered trademark of Dedicated Defined Benefit Services,
Defined Benefit Plans for Small Business Owners
Defined Benefit Plans for Medical Professionals
Presentation for CPAs Copyright 2016 Dedicated Defined Benefit Services, LLC. OnePersonPlus is a registered trademark of Dedicated Defined Benefit Services,
Defined Benefit Plans for Medical Professionals
Presentation transcript:

A Tax Strategy for High Income Self-Employed and Small Practice Owners Defined Benefit Plans for Medical Professionals

Copyright 2009 Dedicated Defined Benefit Services LLC 2 Defined Benefit Plans ─ in the News “Benefits in a Pension for Now and Beyond” “Create Your Own Pension Plan:Classic retirement plans are an intriguing option for shielding small-business income from the IRS” Fortune Small Business, February 2008 “High contribution limits and tax benefits are big pluses for DB plans” Investment Advisor Magazine October 2007 November 2007 “Creating a pension plan helps business owners and the self-employed sock away more tax-deferred cash for retirement” Smart Money, October, 2008

Copyright 2009 Dedicated Defined Benefit Services LLC 3 Today’s Presenter  Advisor Name & photo  Affiliation  Expertise  Connection to audience Replace with your photo

Copyright 2009 Dedicated Defined Benefit Services LLC 4 Agenda  The Personal Pension Plan –Defined Benefit Plans At a Glance –Compared to Other Retirement Plans –The OnePersonPlus ® Program from Dedicated DB  Ideal Financial Situations  Meeting Your Needs –Eligible Compensation –Key Dates –Fees –Opening a DB Plan –Follow through

Copyright 2009 Dedicated Defined Benefit Services LLC 5 Defined Benefit Plans at a Glance  Qualified retirement plan approved by the IRS  Contributions are tax deductible  Highest available contributions and tax deductions of any qualified retirement plan  Contributions are based on: –your age – income –years to retirement

Copyright 2009 Dedicated Defined Benefit Services LLC 6 Comparison of Retirement Plans SIMPLE SEP Single 401(k) DB DB + 401(k) Hypothetical Example: Maximum annual contribution limits in 2009 for a Medical Professional age 52, earning $245,000 annually, retiring in 10 years $49,000 $171,300 Assumes 5-7% funding rate for Defined Benefit Plans $54,500 $21,350 $134,600

Copyright 2009 Dedicated Defined Benefit Services LLC 7 Defined Benefit Plans are Goal-oriented  Goal or “benefit” represents the amount of retirement wealth the plan will provide annually at retirement age  Benefit is established when plans are opened –Based on age, income and years until retirement –Capped at $195,000 per year (for 2009)  Employer commits to achieving the goal through regular, annual contributions large enough to meet the goal  Retirement age is typically set at age 62 or older  Plan can be amended to change the goal

Copyright 2009 Dedicated Defined Benefit Services LLC 8 OnePersonPlus from Dedicated DB A Great Tax Strategy for Baby Boomers!  Typical Plan Sponsors Medical professionals, age Owner + up to 4 employees Expect to Contribute 5 successive years  New Plans Avg. annual contributions: $120,000 Avg. term: 9+ years Integrates with a solo 401(k)  Dedicated DB’s Service Prototype plan documents eliminates cost of actuary, tax attorney Easy to open, efficient to administer – 2-page adoption agreement, simplified forms, pre-filled annual census Set up fee and annual administration fee No administration fees based on size of your account  You and Your Financial Advisor Select the Investments

Copyright 2009 Dedicated Defined Benefit Services LLC 9 Dr. Charles, Owner-only, Age 52  Annual earnings: $400,000  Maximum DB+ 401(k) contribution for 2009: $171,300 –Contribution to DB Plan: $134,600 –Contribution to 401(k): $36,700  Annual tax savings: $65,100 –Combined marginal tax rate of 38%  DB Accumulation at age 62: $2.36 Million –10 years, 5 - 7% rate of return  Annual DB Benefit: $195,000 Sole proprietor, Wants Maximum Tax Deduction

Copyright 2009 Dedicated Defined Benefit Services LLC 10 The Impact of Age on Contribution: The Older, The Better Doctor Charles  Age 52  10 Years to Retirement  Compensation: $400,000  DB Contribution: $134,600  Annual Benefit at Retirement: $195,000 Doctor Tim  Age 35  27 Years to Retirement  Compensation: $400,000  DB Contribution: $16,200  Annual Benefit at Retirement: $195,000

Copyright 2009 Dedicated Defined Benefit Services LLC 11 Anesthesiologists, C-Corp Married Couple in Business Together  5 years from retirement  W-2 Income: $490,000 ($245,000 each)  Total annual DB contribution: $351,800 $171,800 towards Paul’s retirement $180,000 towards Mary’s retirement  Annual combined income tax savings: $133,700  Accumulation at retirement: Paul: $1.1 Million Mary: $1.16 Million Paul, Age 60, Mary, Age 58

Copyright 2009 Dedicated Defined Benefit Services LLC 12 Mollie, Dentist, Age Employees  Owner’s W-2 income: $400,000 Employee 1 age 28 earning $35,000 Employee 2 age 35 earning $45,000  2009 DB contribution for owner: $162,400 DB Contribution for Employee 1: $4,000 DB Contribution for Employee 2: $8,100 93% of contribution for Mollie  Annual income tax savings for Mollie: $61,700*  Retirement accumulation for Mollie at 62: $1.65 Million *Assumes 38% combined state/federal marginal rate Dentist, C-Corp

Copyright 2009 Dedicated Defined Benefit Services LLC 13 Walter, Age 60, Professor at Med School In addition to university salary, Walter has self-employment income from consulting & serving on 2 biotech boards  Annual self-employment earnings: $100,000*  DB contribution for 2009: $80,000  Annual tax savings: $30,400 combined marginal tax rate of 38%  DB Accumulation at age 65: $513,600 5 years, 5 - 7% rate of return * High 3-year average, after payment of self-employment taxes Wants to Secure Retirement with Side Income, Sole Proprietor

Copyright 2009 Dedicated Defined Benefit Services LLC Kumar, Age 48, Radiologist, C-Corp  2009 W-2 earnings: $135,000  Maximum DB contribution for 2009: $51,800  + 401(k) contribution for 2009: $24,600  Total deduction in 2009: $76,400  2009 tax savings: $29,000 –combined marginal tax rate of 38%  DB Accumulation at age 62: $1,630,000 –14 years, 5 - 7% rate of return  Annual DB Benefit: $135,000 Wants high contributions in 2009 but needs flexibility as his income fluctuates

Copyright 2009 Dedicated Defined Benefit Services LLC 15 Eligible Compensation for a DB Plan

Copyright 2009 Dedicated Defined Benefit Services LLC 16 Key Dates  DB Plans must be opened by the end of your fiscal year, for most businesses that will be December 31 st.  The Investment Account will be opened once the Adoption Agreement is signed. If you open the plan before year end, we recommend investing no more than 50% of the assets before you have your final year-end income statement.  The investment account must be funded when taxes are filed but no later than eight and a half months after the end of your fiscal year.

Copyright 2009 Dedicated Defined Benefit Services LLC 17 Fees Defined Benefit Plan  DB Plan Set up: $1200 plus $50 per participant  DB Annual Administration: $1600 plus $100 per participant OR Defined Benefit & 401(k)  Plans Set up: $1400 plus $50 per participant (owner and spouse only)  Annual Administration: $2050 plus $200 per participant (owner and spouse only)

Copyright 2009 Dedicated Defined Benefit Services LLC 18 Establishing a Plan 1.We can run a feasibility proposal for you 2.Bring your accountant into the discussion early 3.Once the plan meets your objectives, we’ll complete a Set-up Questionnaire Send signed Questionnaire to Dedicated DB With Set-up Fee 4.We’ll send you an Adoption Agreement to sign 5.You can begin to fund the investment account