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Small Business Benefits From Private Employer Benefit Plans

Small business owners find that the size of their companies and the profitability of their niche market or popular product put them in the best position to benefit from various retirement plans offered by US Business Finance Corp. Certain Private Employer Benefit plans allow business owners to place much larger amount of funds into their retirement accounts than 401(k)s. Better still, business owners over 40 years old with two to ten employees are prime candidates for these programs.

With the US tax law changes brought about in the EGTRRA 2001 legislation, certain retirement plans were created that allow business owners to contribute a maximum of $40,000 to their retirement accounts. Over 6 times as much as traditional self-employed retirement plans.

Several plans utilize life insurance or annuities to fund the account. A benefit of these plans is the life insurance premiums are paid for with pre-tax dollars and the equity created for the owner and employees is protected from creditors should the company suffer severe financial reversals. Unlike 401(k)s, these plans are buffered from the volatility of the market and can be structured so your principal never loses its original value. Risk is also reduced since the insurance company guarantees the retirement benefits with the annuity or life insurance contract. This benefit, that the assets you place in your PEB are fully protected against market swings, also serves to protect them from any legal actions trying to relieve you of your assets.

Another benefit of using pre-tax funds to finance the Private Employer Benefit plan is it can significantly reduce your state and federal income taxes. This allows business owners to directly benefit, and continue to benefit as their retirement account grows, on a tax-deferred basis. Owners of every type of small business, from a sole proprietorship to a privately held C corporation, can benefit from instituting a Private Employer Benefit plan.

If you need to catch up on funding your retirement plans and the traditional IRA route does not allow you to put away the necessary amount, contact the small business financial advisers at US Business Finance Corp and see how you and your family can benefit from a retirement plan tailored to your business and retirement needs.

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