Invest More
Tax-deferred investment vehicles are a terrific method to save for retirement, reducing hefty tax bites so you can steadily increase your nest egg. These offerings — including IRAs, Defined Contribution plans and variable annuities — can grow your investments tax-deferred or even tax-free while likewise lowering your tax liability potential when it comes time to withdraw funds or begin taking income. The result is less money traveling to the IRS and more money stockpiled for you in retirement. See more on saving taxes here.
But let’s take it up a notch. With Individual Retirement Accounts (IRAs), the IRS places annual limitations on how much money you can place in this investment instrument. These thresholds cap your investing power and lower your tax-deferred earning potential. In some cases, up to 75 percent or more of your income can go into employer-sponsored plans compared to IRAs.
And if you own a business, you have additional profit-sharing potential. Omnia Executive will walk you through tax-saving strategies to help you defer more money, keeping funds in your investments and away from the government. Our team of experts has helped clients defer upwards of half a million dollars annually in their retirement plans.
We look forward to learning how we can help you, too.
Cash Balance Plans
Cash balance defined benefit plans are a great choice for business owners and key employees to save more in a qualified retirement plan than defined contribution plans and IRAs alone. With highly compensated individuals needing to save a larger amount to supplement Social Security in retirement, these options can close the gap on funding your retirement while reducing income taxes year over year.
As an example: Business owners could potentially bring their tax liability to zero by sheltering K-1 income in a cash balance plan in the form of employer contributions. Cash balance plans can even reduce retained earnings and possibly lower their income enough to receive a Qualified Business Income (QBI) deduction.
Qualified retirement plans result in tax advantages for both the employer and employee. The IRS places both funding limitations and limits on how much income can be calculated for benefits on cash balance plans. But these vehicles are particularly beneficial for business owners nearing retirement, as the larger the salary and older the individual, the higher the benefit they receive. Get in touch with us to see if cash balance plans are a viable option for you.
