header photo Mesa 10/29/2019 10:00:00 AM
News / Finance

Strategic Retirement Planning for Executives & Business Owners

Enjoyment in Retirement is Completely Dependent on Having a Plan

At the foundation of the proposal is a defined benefit pension plan and its special provisions that are unique to the Benefit Focused Plan, which addresses income tax, retirement security, and estate planning results. The overall plan has many elements and not all of them can be taken into account in this discussion. Be mindful that there are many factors that could cause the actual numbers of an implemented plan to vary from those estimated. The estimates are formulated to give you a better insight into the concept and workings of the plan. Here’s a quick comparison at the macro level.

Income tax savings1 – As much as $2,245,280 between plan adoption and normal retirement age. This savings could be as high as $4,244,574 if your spouse is a participant in the plan. Thus, the Plan is superbly suited to high-income people who seek tax relief. These numbers are significant and worth testing the plan for suitability.

Retirement security – Up to $35,000 per month combined retirement (with spouse as participant) for you and your spouse as long as either party subsists. This unique strategy can offer substantial tax deductions and lifetime income.

Estate Planning – A two-part strategy that bypasses estate taxes by removing some assets from your estate and provides liquidity by including death benefit provisions in your retirement plan. The plan is funded by tax-deductible life insurance to pay estate taxes on the assets that remain in your estate.

1These income tax savings reflect maximum annual income tax deductible contributions in the first year to the plan of $633,459. Moreover, these contributions are permanently out of the participants’ estate and none of the benefits of the plan use any of the unified gift and estate tax credit equivalency. The tax structure is simply bypassed. Without a Benefit Focused Plan, if these contributions were taken as income and then gifted out of the estate, they would be reduced from $633,459 to $190,037 ($633,459 x 60% x 50%). That, in a nutshell, is the strength of the Benefit Focused Plan: it uses 100% of the earned income contribution to purchase benefits.

Charlie Day is a co-contributor to this press release.