Owner/Employee Retirement Solutions

Owner/Employee Retirement Solutions

A carefully designed retirement plan can not only insure a proper retirement with tax-advantaged benefits, it can also be used as a tool to attract and retain valuable employees. Some small business owners may see their company as the sole source for retirement assets, or feel that a significant retirement plan is beyond their reach, there are actually many retirement programs that are accessible for most small businesses.

These plans include:

Deferred Compensation – In a deferred compensation plan, a portion of earned income is deferred to a later date, which gives both the owner and employee a current tax benefit. These plans can be funded in a variety of ways that will not affect the company’s cash flow when an employee or owner retires.

Split-Dollar Arrangement – This option may utilized as part of the deferred compensation plan, or a stand alone benefit. In a split dollar structure, the company and the employee share the cost of a life insurance policy that accumulates significant cash value. This allows the business to receive a current tax deduction that can offset the cost of the plan.


With low administrative costs, SEPs and SIMPLE plans allows an employer to directly fund a retirement account for themselves and their employees. Contributions into a SEP or SIMPLE are tax deductible and businesses incur no tax liability on the earning.


Most business are familiar with, or have heard of a 401(k). It is the most utilized employee retirement plan in business today. This plan allows the employer to deduct its contribution to an employee’s retirement account, including contributions to his own, and allows the employee contributions to be tax deferred. For self-employed persons this can be an excellent tool for current tax reduction.

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