Take the Bite Out of New Taxes & Higher Marginal Tax Rates with a Defined Benefit or Cash Balance Plan:

• Higher marginal income tax rates and new Medicare taxes translate into a greater tax liability for many high net worth individuals. Increasing deductions by implementing a defined benefit plan can help your clients reduce their Adjusted Gross Income and potentially escape the income bracket where the new taxes come into play.
• Is your client looking to accelerate retirement savings? A defined benefit plan may be an answer. Do not let the tight schedule prevent you from exploring this option. Year-end tax planning conversation is a perfect time to introduce this concept.
• Add a layer: addition of a Defined Benefit or a Cash Balance Plan to a 401(k) plan will assist with increasing deductible contribution levels while efficiently managing employee benefit costs for businesses with non-owner employees or multiple owners. Contribution amounts may vary from one individual to another.
• Plan sponsors have until the due date of business tax return, including extensions, to fund the plan and take a deduction for 2015.
• Read more about Defined Benefit and Cash Balance Plans.

Explore Benefits of a Solo(k):

• Is your client’s ‘free’ SEP or SIMPLE IRA costing them too much in lost deductions and unnecessary taxes? Your client’s compensation or plan structure may be limiting their tax deduction. A 401(k) helps overcome this problem.
• Roth 401(k) provision: as tax rates are trending up, it may be a great time to make a Roth 401(k) contribution or look at in-plan conversions to provide a tax-free source of distributions in retirement. Many prototype plan documents do not have a Roth 401(k) option; contact Retirement Services for a document that allows this important feature.
• Unforeseen circumstances may require that funds be accessed for a period of time; a 401(k) plan offers a way to accomplish this without incurring a penalty.
• Read more about Solo(k) plans.

Do Not Let Your Client Miss Out Another Year with a SIMPLE or a SEP Plan:

• ERISA-qualified plans offer a more robust asset protection than their IRA-based counterparts.
• Diversify tax treatment through Roth 401(k): contributions are made after-tax, grow tax-free, and qualified distributions are not taxed when withdrawn.
• Increase contributions without increasing pay and better manage required contributions for the employees: qualified plans offer a robust set of contribution allocation methods.
• Increase accessibility of retirement accumulations through loans and in-service distributions not available in an IRA-based plan.
• SIMPLE IRA may be the only plan in a calendar year, thus a 401(k) option should be evaluated as soon as possible.
• Read here about the difference a qualified plan may make for your client .

The deadline to establish qualified plans and secure a deduction for the 2015 calendar year is December 31.

Call us today, 888-926-0600 or send a message to pensions@firstallied.com 

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• Cash Balance Plan Advantage (farsupdate.com)