facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Wealth in Waves Ep 15: Cash Balance Plans Thumbnail

Wealth in Waves Ep 15: Cash Balance Plans

401(k) Business Owner Planning Executive Benefits Financial Planning Investment Management Investments Life Insurance Plan Sponsors Pre-Retirees Qualified Plans Retirement Funding Tax Strategies Wealth in Waves Wealth Management

Wealth in Waves Ep 15: BOSS 2.0: Cash Balance Plans

Your business has hit its stride and is consistently profitable. There’s more than enough cash flow to support both the needs of the business and your own household spending, in fact, there’s this extra every month or quarter that you as the business owner are trying to determine how to put to the best use, such as possibly benefiting your own personal retirement plans. The first thing many business owners think of is a qualified plan like a 401k, but let’s say you’ve already got that in place, in fact, you are maximizing the 401k with your own contributions, your company’s match and possible profit sharing. But you can do the math, and even at the 2023 401k contribution limit of $66,000 ($73,500 if you’re 50 or older), it will take many, many years of contributions to eventually replace your 6-figure income when you retire or slow down. Can you sell the business to fund your retirement? Sure, but that decision may be many years down the road and involve a lot of unknown factors. Can you invest in stock and bonds outside of your 401k? Of course, but then you lose the same year tax deduction and future year’s tax deferral of a qualified retirement plan.

So, what do you do? What if I told you there was a way to make tax-deductible contributions into a qualified plan for the benefit of your own retirement that is well above the traditional limits of a 401k? That this could sometimes result in hundreds of thousands of pre-tax contributions for the benefit of your future retirement, potentially saving your business tens of thousands of dollars in taxes this year? 

Hello, my name is Josh Null, sitting alongside co-host Will Steih. We are Gulf Coast Financial Advisors and this is our Wealth in Waves Podcast, a show specifically dedicated to the financial planning, investment management and tax planning needs of established business owners, professionals and entrepreneurs living along the Gulf Coast of Louisiana, Mississippi and Lower Alabama, as well as the pan handle of Florida. Want to learn how to leverage your business’s cash flow NOW to fund the retirement you’ve always dreamed about? You have questions. We have answers. So let’s get to it!

Good afternoon Will Steih, how are you today? Great. For those of you new to the podcast, quick intro before we get to our main discussion. My name is Josh Null and he is Will Steih, and we both are FINRA Series 65 Securities licensed fiduciary based financial advisors. We work together at Gulf Coast Financial Advisors, an independent investment management and financial planning firm based out of Fairhope, Alabama. In addition to his primary role as a financial advisor, Will is also a licensed CPA, which allows us to offer forward looking tax planning services to our clients as well. You can always reach us by calling 251-327-2124 or via our website at gulfcoastfa.com. 

Will, let’s start with our opening example of an established business owner that has excess cash flow after satisfying all of their business and personal needs. They’ve maxed out their 401k contribution. But this business owner knows that as productive as it is to sock away $66,000 towards their retirement, it is unlikely that their 401k nest egg will grow large enough to replace their healthy 6 figure income in retirement. What options do they have? 

Key points:

  • Preferred age of business owner
  • Optimal company size
  • Pro’s /con’s and do’s / don’ts  
  • Using life insurance inside the plan

Great discussion today, Will. Alright, listeners, if this topic is of interest to you, you can reach us at Gulf Coast Financial Advisors by calling 251-327-2124. You can also reach us thru our website gulfcoastfa.com, which lists all of the other services we offer in addition to cash balance plans. 

Many thanks to Coastal College for providing access to their recording studio in downtown Fairhope, to local bank Sloth Racer for supplying the show music, to our producer Chaesare Gray and of course to you the listener, thank you for joining us today. This has been the Wealth in Waves Podcast!

Disclosure:

Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite#150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management ("PCWM") and Qualified Plan Advisors (“QPA”). Certain services may be provided by PCIA affiliates. In this format, Josh Null provides general information, not individually targeted personalized advice, and is not liable for the usage of the information provided.  Exposure to ideas and financial vehicles should not be considered investment advice or a recommendation to buy or sell any of these financial vehicles.  This information should also not be considered tax or legal advice. Past performance is not a guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested.