Many business owners, principals, and executives are not aware of the tremendous personal and corporate tax benefits that can be achieved through the proper retirement plan design.
Most retirement plans are designed for administrative efficiency – not for tax planning purposes. As a result, most businesses are not aware of the options available for designing a tax-efficient plan.
Retirement plans can offer considerable flexibility that can provide tax benefits for:
- Owners, executives, principals, and family members. Plans can be designed to help these individuals reduce personal income taxes, and to grow significant assets while deferring taxes on those assets. Retirement plan assets are also exempt from the claims of creditors.
- Your organization Contributions to a retirement plan can reduce taxes at the entity level. Retirement benefits can also provide a powerful employee recruitment and retention tool. Plans where employer contributions are subject to a vesting schedule can help with employee retention.
- Employees. Plans provide opportunities for employees to save for their own retirement (on a pre-tax or post-tax basis) while their employers can match those contributions up to certain levels. They can also be used as part of a tuition reimbursement program.
Recent changes in tax laws allow companies the ability to review tax planning strategies after the close of their fiscal year. The SECURE Act, passed in December of 2019, allows organizations to retroactively adopt new qualified plans or modify existing ones up until the date they file their tax returns. Cash balance plans defined benefit plans, and profit sharing plans can now be adopted retroactively, providing opportunities to defer taxable income until the following year.
Client Case Study Savings by Optimizing the Corporate Retirement Plan Design
See how we helped save this client more than $1 million in additional tax deductions.
Click here to view the challenges, solutions, and results.
With tax rates widely expected to rise in the near future, the proper retirement plan design can be a win-win for businesses, owners and employees.
Employers interested in learning how to maximize the tax benefits of your current retirement should contact Innovative for a consultation.
Cost Savings Assessment
Here at Innovative, we have built a ground-breaking process that shows employers how they can eliminate waste and reduce costs, SAVING THEM ON AVERAGE 17%.
