Orlando, FL, USA – April 26, 2017 – J Donovan Financial, an Orlando, FL, based group of Fiduciaries, Financial Advisors and Insurance Agents today revealed the best kept tax secret that will help business owners save more money for retirement. According to them, most successful business owners run into the same problem – after starting their business, paying debts and growing their company, the 401(k) just isn’t enough to save for retirement. The 401(k) limits annual contributions to $18,000 or $24,000 (50 and Older) and the Tax Drag of Taxable accounts don’t make it a valid option to save for retirement.
Enter the Defined Benefit Plan, or Pension Plan. Defined Benefit plans are private pensions that business owners can establish to accelerate wealth creation and tax savings in the same package. Adding a Pension Plan can give the owner upwards of $200,000 of annual Tax Deductible Retirement Contributions.
The Contributions are free from both Federal Taxes and State Taxes and are also not taxed on Social Security, Medicare or ACA taxes where the 401(k) is taxed. That’s an additional 15.3% tax efficiency over your 401(k)!
Below is the illustration of the difference of saving in a Qualified Tax Deferred account Vs Taxable:
“If you are currently saving at a rate of $200,000 annually into a taxable account, a Defined Benefit would allow you $333,333 into a tax deferred account at the same cost (No Taxes being Paid). After 15 years of contributions and 15 years of withdrawals, assuming both the Taxable Account and the Tax-Deferred Pension Plan earn the same return, (7% here) the Defined Benefit with an after tax withdrawal will be $204,142 Higher than the Taxable route. Over 15 years the after tax difference is over $3 Million Dollars, with the same investment return,” commented Donovan Joseph Ryckis, Financial Advisor of J Donovan Financial.
For more information, visit: www.JDonovan.Financial
About J Donovan Financial
J Donovan Financial is an Orlando, FL based group of Fiduciaries, Financial Advisors and Insurance Agents who specialize in working exclusively with Business Owners and their employees. As Fiduciaries, they have partnered Nationally with Best in class organizations to offer their clients a level of Independent unbiased research, planning and support that can’t be matched by smaller firms.