Case Study 1:
Custom profit sharing solution maximizes owner contributions and defers substantial tax liability
Vehicle: Profit Sharing Plan
Challenge: Recently, three owners of a small manufacturing company were looking for the proper way to reduce their taxes, save for retirement, and provide a meaningful benefit to a specific group of employees.
Solution: JC Actuarial Benefit Consultants, Inc. researched the client’s business up front, and took time to understand the specific financial goals of its owners. Based on our findings and analysis, we designed a custom Profit Sharing plan that allowed each owner to contribute $54,000 of pre-tax money into their retirement plan. This plan also provided a contribution level equal to 10% of compensation to a certain group of employees, while providing the minimum required contribution to everyone else.
Results: Our custom-designed Profit Sharing plan helped the company’s owners reap nearly $90,000 in tax-deferred savings in one year, while helping them to retain their most valuable employees.Next: Case Study 2