Many companies have one version or another of qualified plan for their employees. Many times these plans are designed to be the least costly for the owner of the company while providing the majority of the benefit to the employees.
If your company has fewer than 25 employees and you have reasonable cash flow, you might want to re-think your qualified plan. Instead of questioning the “type” of plan you might need, ask yourself the following: How much money can I save in a qualified plan?”
When we ask this question, we often get a very different answer—an answer that has Uncle Sam subsidizing your savings plan.
Clients tell us that having the option to choose when it is economically feasible to leave their firm makes their lives better. Putting money into a qualified plan while you’re running your company helps to achieve this goal.
When we work with business owner like you on qualified plans, we want to have a more integrated question about your ultimate exit planning goals. Not only would we like to see Uncle Sam subsidize your plan, but we also want you to have a sizeable bucket of money for living expenses when you decide it’s time to leave your company.
Working on qualified plans can often include some of the following activities:
- Analyzing how much money you can put away with Uncle Sam helping out.
- Evaluating which of the various types of plans makes most sense from your point of view as the owner of the company.
- Presenting your plan to your employees so they clearly understand the real benefit they receive resulting from the money you put away for them.
- Making sure your plan is in compliance with the Department of Labor and IRS.
- Helping you understand the various sources of your income when it’s time to leave your business, as well as the role your qualified plan plays in cash flow planning.
- Using your qualified plan as a current tax control tool.
Qualified plan analysis is technical work in which you might not have a great deal of expertise. If you decide that having an effective and efficient plan will make your life better we show you your options in an understandable manner. This will also help you make an intelligent decision about what’s best for you and your company.