A self-employed 401(k)—also called a solo-401(k) or an individual 401(k)—is a special savings option for small-business owners who don’t have any employees (apart from a spouse). That makes these accounts a good fit for sole proprietors and independent consultants who are looking for a retirement plan similar to one they might get from working at a larger company.
Simple IRA plans can provide a significant source of income at retirement by allowing employers and employees to set aside money in retirement accounts. SIMPLE IRA plans do not have the start-up and operating costs of a conventional retirement plan.
Simple IRA’s allow employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
A profit sharing plan is a type of plan that gives employers flexibility in designing key features. It allows the employer to choose how much to contribute to the plan (out of profits or otherwise) each year, including making no contribution for a year. Employers start a profit sharing plan for additional reasons:
A well-designed profit sharing plan can help attract and keep talented employees.
A profit sharing plan benefits a mix of rank-and-file employees and owners/managers.
The money contributed may grow through investments in stocks, bonds, mutual funds, money market funds, savings accounts, and other investment vehicles.
Contributions and earnings generally are not taxed by the Federal Government or by most state governments until they are distributed.
A profit sharing plan may allow participants to take their benefits with them when they leave the company, easing administrative responsibilities.
Nonqualified Deferred Compensation Plan
A nonqualified deferred compensation (NQDC) plan is an arrangement that an employer and employee agree to where the employer accepts to pay the employee sometime in the future. Executives often utilize NQDC plans to defer income taxes on their earnings. They differ drastically from qualified plans, like 401(k)s
Deferring this income provides one tax advantage: You don’t pay federal or state income tax on that portion of your compensation in the year you defer it – (you pay only Social Security and Medicare taxes), so it has the potential to grow tax-deferred until you receive it.
As a sole proprietor, you are likely the primary income earner at home. Your family will bear the load of your lost income if something happens to you. Being a business owner also means you have a duty to fulfill your contractual obligations to clients.
Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insured’s beneficiaries when the insured dies. That beneficiary could be your spouse, children, business, business partner or Trust.
Disability Insurance (Long and Short Term)
Disability coverage provides you with the support you need if you were to become hurt or sick and could not work. Long-term disability insurance can offer years of replacement income, lasting well into your 60s in many cases, while short-term disability helps during a temporary injury or illness.
As business owner the protection of your ability to earn an income, is vital. In most cases, your business is dependent on you being present and capable of fulfilling all your duties both mentally and physically.
Health insurance is a type of insurance coverage that pays for health and medical expenses. Health insurance covers some or all of the costs of routine care, emergency care, and treatment for chronic illnesses. If you are a Sole Proprietor, small business owner or a part of a large corporation, you understand the value of having good health insurance.
Health insurance is of vital importance for essential and nonessential procedures, illnesses, Dental and eye care, accidents, and general peace of mind for the unforeseen medical emergencies we all may encounter at some point in our lives.
Critical Illness Insurance
Supplements your medical and disability income coverage. It can ease the probable financial impact of certain critical illnesses by helping you pay for some of the expenses that are not covered. It does not replace current medical insurance; rather, it provides a lump-sum payment for certain covered conditions.
Critical illness can be used by business owners, to enhance an employee’s salary package with the company or as an incentive subject to terms and conditions.
Key Person Insurance
Key person insurance, also called key man insurance, is life or disability insurance that a business carries on its core employees.
The reason this coverage is important is because the death of a key person in a small company can cause the immediate death of that company. The purpose of key person insurance is to help the company survive the blow of losing the people who make the business work.
Employer Defined Benefit Plans
Defined benefit plans provide a fixed, pre-established benefit for employees at retirement. Employees often value the fixed benefit provided by this type of plan. On the employer side, businesses can generally contribute (and therefore deduct) more each year than in defined contribution plans.
Does this category best suit you? Would you like to chat to one of our advisors about how we can best serve you in this area?