Q4 is when these big money clients sit down with money managers— financial advisors and accountants— to crunch the numbers, review tax liabilities, and figure out how much they owe Uncle Sam.
This also when they are most receptive to creative, new tax strategies and timing is everything. It is the time for them to act like a decisive CEO; and also to save big, like a successful CEO.
They may have read this year’s WSJ article revealing GOP presidential candidate Jeb Bush’ use of a Defined Benefit Pension Plan to save taxes. The piece titled, “Pension Plan Cut Jeb Bush’s Taxes” details how this “little-known but perfectly legal tax strategy to set aside annual average of $350,000 for last five years,” worked for the Bushes. Here’s the full article: WSJ Jeb Bush Pension Plan.
This type of pension plan is used by savvy advisors as part of financial planning to lower the tax bills of high net worth clients. The tax strategy is most advantageous for small-business owners or self-employed professionals (think attorneys and physicians in high tax brackets) looking to save as much pretax income as possible for retirement.
The PensionQuote pension plan veterans take it a step further with sophisticated designs and approaches for maximum tax advantages, using Cash Balance Plans, and Split Funded DB Plans (using life insurance for partial funding), to help you have critical year-end conversations that will solve your clients’ tax issues.
With only a couple of years since the tax increases were implemented, the initial shock may be wearing off but clients are sure to feel it again after January 1st. Reviewing where clients stand now, and reviewing ways to mitigate these higher tax liabilities next spring, is key.
Reiterating the perfect client profile for these plans:
- Small to midsize business owners looking to save significantly more than they can in with standard 401(k) plans.
- Law firms
- Medical practices
- Privately-held family businesses
We feature case studies that show successfully implemented plans. Review some of our Case Studies. Inquire about unique Split-funded Plans using life insurance to learn if your clients are good candidates. It is a very interesting component of the plan design, allowing for succession and estate planning, overall retirement planning, plus a tax-free death benefit for the life insurance beneficiary.
Tick tock… the clock is ticking on 2015. Connect with a plan specialist to learn about these tax strategies and implement a plan before the clock strikes midnight on New Year’s Eve. www.pensionquote.com.bushpensionplan, cashbalanceplans, definedbenefitplans, endof2015, pensionplans, splitfundeddbplans, taxsavingstrategy, yearend