Over the years, Congress has eroded the tax “loopholes” available to business owners. One of the few still available revolves around employee benefits such as insurance, deferred compensation plans, and pension plans. Accordingly, developing a financial plan that focuses on the tax advantages of retirement plans and life insurance is an important issue for many businesses.
If you have a small or medium-sized company, your business may be the only significant asset you own. If this is the case, your effort and reputation are likely the major reasons for the business’s success, and you may be unable to sell the business for enough money to provide an appropriate retirement income. Developing a business financial plan that focuses on the key tax advantages of retirement plans and life insurance is an issue you should address as soon as possible.
In addition, when properly structured, retirement, deferred compensation, and other fringe benefit plans can help improve employee morale and retain key employees.
In the past, many of the more sophisticated pension options were only available to large corporations due to their complexity and high administrative costs. However, recent changes in the IRS code and advances in technology have opened up some of these pension solutions as viable and affordable options to small- and medium-sized businesses.