Disclaimer: This article is for informational purposes only, and not intended to offer tax or legal advice.
Planning for retirement is a huge step in one’s professional life. Whether you’ve just begun your career or you’re decades into it, it’s never too early to begin planning for retirement. For many, this involves investing in stocks, bonds, or other ventures. While this process is right for many, others are looking for a novel way to grow their wealth and plan for the retirement they deserve.
One of the most advantageous retirement funding options for entrepreneurs and their employees out consultants suggest is turning to Executive Bonus Plans (EBPs) and Executive Double Bonus Plans (EDBPs) to begin growing retirement funding as quickly as possible.
These plans give you and your employees much more wriggle room when it comes to planning and responsibly saving for retirement, as well as a few more benefits. Here’s how it works.
Why you need consultants’ input on retirement funding
Entrepreneurs have seemingly endless items to worry about. From running daily operations to considering how to handle the next growth phase, they have little time to explore options as far away as retirement for themselves and their employees.
Our consultants can help change that. For years we’ve helped entrepreneurs just like you implement novel solutions to proper retirement funding—all while lowering your tax liability. Our retirement planning options for business owners ensure you keep more of your money in your bank account than with other retirement funding options but creating a life insurance and retirement plan that pays for itself.
This approach effectively frees up precious personal funds rather than spending them on premiums that quickly and substantially eat away at income that could otherwise go directly to your retirement fund.
How it works
Real Wealth Solutions’ consultants help both C and S corporations compliantly plan and implement EBPs and EDBPs to begin funding retirement immediately. This means that your business benefits from paying these bonuses as they’re viewed as tax-deductible company funds, which can then be used as supplementary retirement funding.
Simply, your organization pays a bonus to an executive, which can be another executive or you. This bonus is taxable as income for the recipient, but it is tax-deductible for your business. Once the bonus is paid, the recipient can then use the funds to purchase a life insurance policy to begin growing the retirement funding. Once you or the executive retires, tax-free withdrawals can be made against the policy’s cash value, making it an easy option for the holder.
EBP and EDBP benefits
These plans offer a number of retirement benefits to holders:
- Tax-free growth and tax-free distributions
- Tax-free deferred growth may be used for purposes besides retirement
- Zero exposure. In the event of a lawsuit, your money cannot be taken from you
- Access the cash value at any time, whether before or after retirement
- Beneficiaries receive tax-free benefits upon your passing, removing one level of stress in the event of your death
- Limitless contributions with no cap
These plans offer virtually no downsides. One thing to remember, however, is that depending upon your plan’s structure, the cost of your insurance may increase. This increase may be marginal or more substantial, and it’s important that you speak with our consultants if you have any concerns about this potential issue.
Start funding your retirement with Real Wealth Solutions
Planning early for retirement means that you begin accumulating wealth quicker with more growth potential than starting later in your career. Even if you’re well established in your space, it’s never too late to begin a smarter, more effective retirement funding plan.
Contact Real Wealth Solutions today to speak with a consultant and learn how you can begin accumulating retirement funds as soon as possible.