So you're a small business (for arguments sake 300 or less EE's), a smaller business, or self employed. Congrats!! The government wants every penny from you because you're trying to make it with the latest e-Commerce or Forex Guru!

You opened up that shop you always wanted downtown, you made it through the first year of bonus write off's and now here comes the second year where the government isn't too kind. What're you going to do now?

If you're a savvy business owner, you already know that there's Self-Employed Retirement plans available to you to start saving for retirement. There's the solo 401(k) and the SEP IRA plans that you could open, both with really favorable contribution limits. As of this writing the cap for 2022 on SEP IRA's is up to $61,000! The same can be said of a solo 401(k) AND you can contribute to both plans at the same time. That means you're able to reduce your taxable income by over $120,000! Now there are differences as to which income is reduced and all of that, but I'm not a tax professional or CPA, but I do work with many of them. A few of the biggest questions they ask is, 1) What happens to all of that money? 2) Why aren't more of my small businesses using this savings trick? and 3) Does it really benefit them to put their money there?

So you've done it! You've put your money away into a SEP IRA because you hear that it has the best returns through some fidelity investor. Now what? What happens to your money? Your money is directly linked to the market, the DOW, S&P 500, Etc. Whether you like it or not, the performance of the stock market trio (DOW, S&P, & NASDAQ) WILL have an affect on your savings. As of this writing, the DOW has performed horribly causing the market to go down with it. Currently in the last 5 days the DOW is down more than 1,000 points and still dropping, that's 3.09%.

Not only that, your money in the stock market is not favored in the rule of 72. Compound interest, as you know, speeds up the rates of return on your savings. Well, how could it do that in a market that can and does take losses every single day? That's not TRUE compound interest if you ask me. I know what you're thinking, "Yes, I already know this, I've been investing for years and there's nothing you can do to prevent the rollercoaster of the market from happening. It's why saving for retirement is a gamble." Well my friend, your thinking may need to change. Why should your savings be gambled away? If you're a business owner or 1099 employee, shouldn't you want and NEED a strategy that can give you rapid guaranteed returns over time?

So if your money is being gambled away, then why save at all?! If you're not already saving, you're not alone. Did you know there are over 31 Million entrepreneurs and business owners in the US? Out of all of those people, 11.4 Million of them aren't saving for retirement...like...at all. There's varying reasons as to why, and most are valid. Check out the pie chart results from CNBC:

37% - I don't make enough profit to save for retirement

21% - I used my previous retirement savings to invest into my business

18% - I plan to sell my business to fund my retirement

12% - I don't have any plans to retire

12% - I don't see the need to save for retirement

Where do you fall in this category? Notice the top 3 answers, however we're going to focus on the third place answer, because we already know how the other two are. So let's say your the savvy owner who says, "No need to save! My business is going to make me enough money to sell one day!" Ok, let's say your business is worth $1 Million when you want to sell it, did you know you're going to be taxed either 20% (long term capital gains) or 37% (short term capital gains)? So when you retire at 65, depending on the capital gains, you'll retire with any where from $25K - $32K a year for 25 years. Did you know the outcome is the same for those who put their money into SEP IRA's and solo 401(k)'s? Along with that, by the time we retire (2055-2065) our tax bracket can very well be in a 40% range.

Now if you're a part of the 20 Million of us who do save and are saving for retirement, you're most likely facing problems with additional write offs. One business owner I spoke to said something interesting to me. He said, "Joshua...I have money, my business is making money, but my money has a funny way of disappearing when I put it in the market. It also doesn't help that I'm maxed out on write offs." I couldn't help but laugh with him, and said, "I have a solution for you..."

All of this information begs the question, why save at all? If compound interest doesn't work in your favor in a SEP IRA / Solo 401(k), how much is it benefiting you to actually place your money there? The only answer is the reduction in taxable income. Now, there's absolutely nothing wrong with having a large/diversified portfolio, as a matter of fact, it's encouraged! What if there was a way where you can expand your portfolio and at the same time insure your SEP IRA or 401(k) from the losses it takes? All the while, you're able to write off the contributions to your business, and if you contribute to your employee's plans you're also able to write that off as well. Along with that, all the money you accumulate is TAX FREE, works on ANY budget, and makes guaranteed returns EVERY...DAY... Would that give you a reason to save?

The moment we've all been reading for! The well kept secret by the wealthy, the only way you can get guaranteed returns, the one and only!! The Executive Bonus Plan! You, as a business owner, can open up a properly structured Indexed Universal Life (IUL) policy and everything you put into that policy can be a write off to your business. Why? Because the money that's being placed in there is gaining cash accumulation that you can one day use for anything, even supplementing retirement.

I know what you're thinking, "I've learned about IUL's and they have caps, not that great of returns, and cost of insurance." Some companies don't have caps on their IUL's, and the rate of returns are greater over time than the market. As of this writing the S&P 20 year avg is 5.3%, while the IUL avg is sitting pretty at 9% and that's not including compounding interest. If you're a business owner, you know...insurance isn't free, nothing is free. Even in a SEP IRA and 401(k), you're paying for someone to manage your money. Did you also know that you can put in more into 1 IUL policy than a SEP IRA and 401(k) combined? As of this writing a 35 year old male can place up to $132,424.00 into an IUL annually, a female is over $109,000.00 (females have better rates than males). You also can have as many IUL's as you want, imagine you're a female business owner and you have three $3 Million IUL's to cover your business, family, and future...do I have your attention now?

Here's a quick pro's and con's list:

Higher return potential

Tax-Free capital gains

Greater flexibility

Permanent death benefit (Tax Free to beneficiaries)

Market loss protection

Guaranteed returns

Tax write off to your business (Yours & EE's)

No social security impact for when you retire

Living benefits (use your insurance while you're alive)

Free bonus benefits (depending on state)

 CONS:

Caps on return (some IUL's have no caps)

Cost of Insurance (nothing is free)

As you can see the pros heavily outweigh the cons. Now it comes down to your final question or thought. HOW do you get started and set all of this up? 

I'm not only a financial solutionist, I'm a Financial Professional! I can show you an in depth personal plan to meet your financial needs. If you'd like to connect, please click on the booking link below and either myself or one of my trusted associates will be more than happy to help you.