Business owners may benefit from diversifying holdings away from their company and into retirement plans. Retirement plans are one of the last great tax shelters, and as phase-out limits fall, and tax rates rise, they become more important every year.
Most business owners truly want to help their employees save for their future, and offer retirement planning, a cornerstone benefit for employees. The truth is that without retirement plans at work, most employees would not be on track, and in fact, many would have no retirement savings at all.
If you are like other business owners, you are short on time, many of your assets are in the business, and you may be paying too much in taxes. You are concerned about your employees, and especially about your family.
Retirement Plans for Business Owners
- Is your retirement plan working for you and your employees?
- Do you fully understand your fiduciary responsibilities?
- What strategies do you use to reduce future taxes?
- If something happens to you; what will happen to your business?
- Will the business maintain its value for your family?
- Do you have a succession plan or exit strategy? Is it codified?
- Does your estate plan cover all of the assets and protect your family in all possible scenarios?
- How do you retain your best employees?
- Have you addressed the fiduciary liability of having a retirement plan?
- Is your retirement plan cost efficient?
- Do you have a financial advisor who understands the issues involved with being a business owner?
How we work with business owners
The fact is, many people are so busy that personal retirement planning often gets neglected. Most likely, your business is the engine that drives your financial life, and our financial advisors want to support you. We see our jobs as more than just wealth managers. We will help you identify any holes in your financial planning that might endanger your business or your family.
Financial advisors at McClure work with all types of businesses from start-ups to more established corporations. As business owners ourselves, we understand the entrepreneurial journey and can help you evaluate all of your investing options from a place of experience.
This is why we typically lead a team of supporting business professionals from various disciplines including CPA’s, estate planning attorneys, business attorneys, and health insurance professionals. We aim to make sure that your business needs are evaluated from all angles and help you grow and protect your business, retain key employees, and secure your family’s future.
Comprehensive Planning
We take a collaborative approach to constructing client portfolios. Whether it’s a company or individual retirement plan, the financial advisors at McClure take the time to sit down with each client to review their financial position and understand their current and future goals. Then, we build a savings and investing road map and explore options for investing client assets. Every year, we provide individuals with portfolio review sessions. For companies, we host enrollment meetings, annual reviews, and educational events to increase participation in their retirement plan and to help their employees secure a better financial future.
Group 401(k)s and Retirement Plans
How do you know if your company is utilizing the right retirement plan? How do you know if the investments in your company plan are the best ones? We provide the outside expertise and perspective you need to objectively assess which plan is the best fit for your company. We often find that business owners are unaware of the tax advantages available to them through the right retirement plan.
There are many tools available, such as:
- SIMPLE IRAs
- SEP IRAs
- Traditional 401(k)s
- Safe harbor 401(k)s
- Profit-sharing plans
- Defined-benefit plans
- Cash balance plans
- Deferred compensation plans
Understanding Plan Investment Options
Most retirement plans require participants to select specific investments from a menu of available choices. Employees setting up their retirement plans often don’t understand the differences among these different investments or how to go about choosing them. Once your employees have invested their money into your company plan, we can help them manage their investments and know when it makes sense to change their selection.
Group retirement plans are our specialty, and we’ve worked with companies of all sizes and all major types of retirement plans.
Fiduciary services
Retirement Plan Administration
Whether your company is adding a retirement plan for the first time or you want to reevaluate your existing plan, we will recommend, set up, and manage the best plan structure for your organization. We serve as an extension of your company, providing the expertise that allows you to offer a more competitive retirement plan without taking on unnecessary costs or excessive risk.
- 3(21) and 3(38) fiduciary services
- Fund evaluation and selection
- Employee education to encourage higher participation rates
- Creating tax-advantaged retirement vehicles for executives and highly compensated employees
Employees Can Call Us With Big-Picture Questions
Who do your employees call when they need advice about their retirement plan? Employees at many companies often just call the 800 number of their plan provider when trying to think through their options, but third-party administrators cannot give financial advice. We enjoy serving as a go-to resource for employees who are trying to understand the big picture and need more support to get the most out of their retirement plan.
We can advise on various topics to help your employees:
- Understand how their retirement plan works
- Decipher the funds available in the plan and decide which ones are appropriate
- Roll over prior 401(k) or individual retirement plans
- Maximize your contributions to your retirement fund
- Think through their major financial decisions
Whether your employees need help making the most of their retirement, rolling over their prior accounts, or evaluating their full financial picture, we help them focus on strategies that fit their needs and grow their wealth. At McClure Wealth Management, we act as a resource to employers and their teams.
What we review for business owners
If you are self-employed, the retirement planning process is inherently more complex. Your business has needs of its own separate from your household and family needs.
Retirement Strategy
Many times, small business owners miss tax-saving opportunities or underfund their retirement because they are unaware of the available options. We will identify the best plan for your company based on the structure, size, and age of your workforce.
Tax Mitigation
Setting up the right vehicles to support your retirement plan can have enormous tax implications over the life of your business. There are many options we have that allow you to lower your tax bill and keep more of your earnings.
Risk Management
The right insurance policies provide crucial protection in the event that an injury or illness renders the owner of a company unable to work. We can evaluate your current life insurance, long-term disability, key person insurance, workers’ compensation, and general liability to ensure that your coverage is optimized for your needs.
Succession Planning
The retirement planning process is inherently more complex for the owner of a business due to the tax structure and multitude of options available. Also, business owners often do not retire all at once, but may choose instead to transition out of running the business full-time. We can help you evaluate your strategy for cashing out and understand what you need to do now in order to set up your business to provide you and your family with a prosperous future.
Work with us to put a foundation in place to enjoy a prosperous retirement and provide for your family’s future:
- Cash Flow & Contingency Planning
- Exit & Succession Planning
- Business Insurance & Risk Assessment
- Buy/Sell Agreements
As long-time business owners, we enjoy working with fellow business owners and serving as a sounding board for the same challenges we all encounter sooner or later.
Common mistakes
Most business owners and employees don’t have anyone to talk to when it comes to their retirement plans. We at McClure Wealth Management are here to help you avoid making the mistakes that slow the growth and preservation of your wealth.
Some mistakes we have seen business owners make:
- Keeping too much rainy-day cash in the business and missing opportunities to put your capital to work for you
- Starting too late to take advantage of tax-saving strategies
- Failing to understand and comply with applicable employment laws governing benefits and retirement accounts.
- Failing to put adequate checks and balances in place to ensure proper accounting and management of employee retirement plans.
More on business retirement plans
Multiple Employer Plan
Maintaining a company retirement plan takes time and patience and carries a great deal of fiduciary risk. With the Multiple Employer Plan 401(k), you can reduce your burden and achieve economies of scale in retirement plan pricing for your company.
CalSavers
CalSavers is a new California state-run ROTH IRA program for private-sector employees who do not receive retirement benefits from their employer.
Employee Education
Employee education is one of the most overlooked aspects of managing company retirement plans. Having the right plan is only part of the picture; employees need regular education about how their retirement plan works and how to utilize the options available to them.
Talk to us about your plan
Give us a call today to learn more about working with us to find the right kind of plan for your company.