Prime Time for Short Timers

Adrian Powell FIC
District Agent
Modern Woodmen of America

Posted 06-023-09

If you are an owner of a small business that is approaching retirement and are worried about being short of income in your retirement, there is still an opportunity for you to make your life a source of comfort and ease rather than worry and fear.

Provisions that already exist in current tax law makes it possible for you to put away up to 100 percent of your current income for a qualified defined benefit plan up to a current maximum of $296,867 for a 55 year old planning to retire at 62.

Unlike defined contribution plans like 401(k)’s, defined benefit plans allow for contributions to be made at such a level as to allow for the needed amount of monthly income to grow on a guaranteed basis using guaranteed contracts instead of returns based on the market, which in recent months has shown extreme volatility with no real signs of stabilizing anytime soon.

Because the interest rate assumptions are guaranteed, they require higher levels of contributions. However, with those guarantees, the client does not have to worry about the funds being available when they are needed in retirement.

The current economic situation has pointed up that fact that many pre-retirees who had thought they had significant assets to provide stable retirement income are having to re-evaluate their strategy or face changes in their standard of living.

Small business owners who are owner/directors of highly profitable closely-held corporations, solo practitioners and partnerships are all types of business people who should take a look at this opportunity to have significant income put away for their retirement.

These are retirement planning techniques that top planners have used for years. Why don’t you see if you can put it into effect before it’s too late?

Adrian Powell, Fraternal Insurance Counsellor, is the founder of Advanced Planning, Pensions & Financial Advice. He is a member of the Society of Financial Services Professionals and National Association of Insurance and Financial Advisors. His e-mail address is Adrian.d.powell@mwarep.org. His website is www.advancedplanningfinancialadvice.com.