412 Defined Benefit
412 Defined Benefit Pension Retirement Plans
While a goal for many small business owners is to ultimately fund their retirement through the sale of their business to an outside company, business partners, or employees, this isn’t always possible and it is dangerous to rely on such an event. An increasing number of individuals are becoming freelancers, consultants, and launching their own businesses as a second career with an ever-diminishing amount of time to contribute to robust 401k retirement plans. One great solution for such independent professionals and high-income business owners comes in the form of 412 defined benefit pension retirement plans.
A defined benefit pension plan can be sponsored by your own business on your behalf. The 412 Defined Benefit retirement plan allows freelancers, consultants, and small business owners to make fairly large tax-deductible annual contributions into the plan; these are much higher contributions than those allowable under traditional 401k retirement plans. This enables you to build up a much more sizable retirement investment while allowing you to substantially reduce your tax burden. A defined benefit plan can be a much smarter and safer investment than simply hoping you’ll be able to sell your business when the time for retirement comes.
For more information about these strategies and how they would apply in your situation, we would encourage you to please schedule an appointment with us.