August 2009

One of the most complicated issues facing owners of small businesses and practices is what to do about retirement plans. As I visit with our local professionals, I’m finding that one of their biggest concerns is what to do about putting money away for their own retirement on a tax favored basis. Some I have talked to have terminated their retirement plans due to lack of participation and/or administration expense. In other cases the termination was due to being forced to contribute a certain amount each year, regardless of their revenue.

This is unfortunate because in each case they are not only denied the opportunity to save a good bit on income taxes during the period when tax savings are needed most – but they are now limited to the IRA limits of $5,000 per year (under 50 years of age).

You should be aware that there are options out there that could go a long way to help solve both the tax problem and the retirement problem, but this typically can’t happen very well with canned plans from insurance or mutual fund companies.

For a plan to provide the needed benefits for owners as well as what they want for their employees, it most often takes a carefully crafted design that fits each specific need. This is really the only way to come up with a plan that can be comfortable enough to stay in place and do the job for years to come.

If you have any questions along these lines at all, give me a call or send me a note. We have experts who do nothing but handcraft plans to fit individual, specific needs. We’ll do what we can to help.

Max W. Smith, CFP^®, CIMA^®
Chairman - Hillspring Financial, Inc.
Allied member - Arizona Veterinary Medical Association