Helping Small Businesses Offer Benefit Packages to Employees
February 05, 2016
Submitted by Modern Woodmen
When you read or hear the name “Ruth Ahnen, Financial Representative with Modern Woodmen of America,” the first thing that might come to your mind is, “I bet she helps people with personal life insurance, mutual funds, their current and old 401(k)s, and accumulating and distributing their retirement savings.” That first thought would be absolutely correct, too, because she has helped several people in the Quad Cities with these exact financial concerns. What you might not know, however, is that Ruth also specializes in helping small businesses all across the Quad Cities. She builds plans to help these small businesses offer benefit packages to their employees, many times at little or no cost to the business owner.
Many small business owners believe they do not have enough employees or are not financially able to offer benefits. Those owners are surprised to learn they can take advantage of many benefit packages and the tax advantages that go with those packages with as few as one employee. The ability to offer benefit packages through Modern Woodmen of America can assist business owners in not only attracting quality employees but also can aid in employee retention. By working with a Financial Representative like Ruth, the business owner is able to put together a custom package that works for that business.
The greatest asset a company has is its employees, and attracting and retaining good employees is key to an owner’s piece of mind and the business’s profitability. Ruth can help make the process of creating benefits packages more simple and streamlined for nearly any small business. A solid partnership between Ruth and the owner can help determine the most cost-effective solution that will satisfy the needs of the business, the owner, and the employees.
Can your small business offer a 401(k) plan to the owner and its employees? Are there ways to protect your business if a key employee dies? How much would it cost to offer health insurance to your employees? What would happen to your farm if you passed away — would your children be able to keep the farm or would they have to sell it to pay estate taxes? Could you hire and retain better employees if you could offer a Roth IRA to your employees? If you have questions similar to these, you could benefit greatly with a short conversation with Ruth. The answers to these questions can give your company the competitive edge in securing skilled employees who want to stay and grow with your company.
Many Employee Benefit Plans Are Available, Including:
- Salary Allotment Plans for life insurance and annuities
- SEP and SIMPLE IRA plans
- 401(k) plans, including profit sharing plans
- 403(b) plans
- Executive Bonus Plans
- Split Dollar Life Insurance Plans
- Supplemental Executive Retirement Plans (SERP)
Your business’ future may depend on the steps you take today. Let’s take a closer look at the most common used plan options.
Salary Allotment Plans
A voluntary payroll deduction program allows your employees to purchase life insurance and/or annuities. You deduct the monthly premiums from their paychecks and remit one check for all of their premiums. Help give your employees the ability to save for retirement or provide for their families in the event of their death.
SIMPLE IRA Plans
May be easier to establish and maintain than other qualified retirement plans, SIMPLE IRAs are an excellent choice for small-business owners. Employer contributions are tax-deductible, while your employees may also make pre-tax salary deferral contributions.
The SEP-IRA is ideal for self-employed and small-business owners who want to offer a retirement package without assuming the requirements of more complex plans. As the employer, you make tax-deductible contributions on your employees’ behalf. However, your employees may not contribute directly to their SEP-IRA.
A 401(k) plan is an excellent way to provide a retirement plan for yourself as well as your employees. 401(k) plans can be more complex than other retirement plans; however, they give business owners the power to structure a plan to fit their unique needs due to their ability to offer the following:
Split Dollar Life Insurance Plans
- Tax-deductible employer contributions through matching and/or profit sharing contributions.
- Generally higher contribution limits than other retirement plans.
- Pre-tax and designated Roth contributions may be available for eligible employees.
As the employer, you take out a permanent life insurance plan on a selected employee. You split premium payments, cash values, ownership and death benefits with your employee. As the employer, you are able to receive the cost of your contributions to the plan upon the employee’s death, while the employee’s beneficiaries receive the remaining death benefit.
Executive Bonus Plans
Business owners can provide additional benefits to employees or executives of their choice. An executive bonus plan usually includes life insurance with cash value that can be used to supplement retirement income. The business can use these plans to selectively provide benefits to key people, using tax-deductible company contributions. The bonus payments are tax-deductible to your business and are not subject to qualified plan limits.
In addition, the key employee is able to name his or her own beneficiary who is entitled to the entire death benefit of the contract.
This is just a simple overview of each plan. Needs vary from person to person, so a plan that works for you may not work for another. Contact Ruth to learn more about each plan and which may be right for you.
Every small business deserves an opportunity to offer a retirement plan to their employees and to help them prepare for the future. If you own a small business or work for a small business and want to see if Ruth can help you and your business achieve your goals, simply call her at 563-508-0842 for a free, no obligation consultation.
Many Quad City businesses have already taken that first step and are extremely happy to call Ruth a valued business partner.
To begin working on your retirement plan, call Ruth Ahnen, financial representative for Modern Woodmen of America, to schedule an appointment. Call 563-508-0842. Don’t wait until it’s too late.
Securities offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC.
Tax issues can be complex. Consult a tax professional before making a decision.
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February 05, 2016