Knowledge, Experience, Accessibility, and Family Owned

Privately held Businesses and Corporations face unique challenges that require the knowledge of an entrepreneurial firm like KWM.  A qualified retirement plan can provide large tax deductions while allowing the business owners to save for their retirement. Qualified plans include a 401(k) Plan, a profit sharing plan, a defined benefit plan or a hybrid combination.

Kolinsky Wealth Management’s Retirement Planning Division has the resources and depth of experience to provide a variety of retirement plan designs and services.

As our clients are different, so are the retirement plans we develop for them.  High net worth individuals sometimes require unique elements to their plans.  Each plan design should have components that reflect a client’s current circumstances and future needs.  It is our goal to provide the expertise and tools that will help ensure a secure financial future for each of our clients.

Retirement Plan Designs

OWNER + EMPLOYEES MEDICAL PRACTICE

Objective: Maximize owner contribution and tax deductions
Profile: Doctor, age 48, with 5 employees
Solution: Profit Sharing Plan

Participants W2 Salary Employer Profit Sharing Contribution
Owner 270,000.00 55,000.00
Employee 130,000.00 6,500.00
Employee 17,000.00 850.00
Employee 51,500.00 2,575.00
Employee 40,000.00 2,000.00
Employee 24,000.00 1,200.00
Plan Total 68,125.00
Owner’s % of Contributions 81%

FATHER + DAUGHTER BUSINESS

Objective: Maximize father’s contribution and have daughter to save money for retirement
Profile: Father, age 60, and Daughter, age 30.
Solution: 401k plan to max out Father’s contribution and allow daughter to deferral salary

Participants W2 Salary Employer Profit Sharing Contribution
Father 270,000.00 61,000.00
Daughter 130,000.00 15,000.00

BUSINESS OWNER-NO EMPLOYEES

Objective: Maximum contribution and tax deduction
Profile: Business owner, age 50, has W-2 income of $300,000 and plans to retire at 62.
Solution: Defined Benefit (DB) Plan for 10 years and a 401(k)

DB Only DB & 401(k)
2017 Contribution: $186,800 $227,000
Tax [email protected] 38%: $70,900 $86,200
Projected DB Accumulation: $2.60 Million
Annual DB Benefit: $215,000

BUSINESS OWNER-NO EMPLOYEES
W-2 INCOME FLUCTUATES

Objective: Reduce taxes, retain flexibility
Profile: Plumber, age 46, W-2 income of $185,000 this year, not sure it will always be this high.
Solution: DB Plan for 14 years, optional 401(k)

DB Only DB & 401(k)
2017 Contribution: $110,300 $139,400
Tax [email protected] 38%: $41,900 $52,900
Projected DB Accumulation: $2.24 Million
Annual DB Benefit: $185,000

MARRIED BUSINESS PARTNERS,
NO EMPLOYEES

Objective: Maximize retirement savings
Profile: Husband & wife marketing firm partners, Steve age 59, Jessica age 57, W-2 income for each is $270,000, both plan to retire in 5 years.
Solution: DB Plan for 5 years, optional 401(k)

DB Only   DB & 401(k)
2017 Contribution: $429,500   $509,900
Tax [email protected] 38%: $163,200 $193,700
Projected DB Accumulation: $2.49 Million
Annual DB Benefit: $215,000

EMPLOYEE WITH SIDE-INCOME

Objective: Reduce taxes on side income
Profile: W-2 Employee of a firm, age 52, with a consulting business on the side has $150,000 in sole proprietor income (after paying self-employment taxes) and plans to retire at 62.
Solution: DB Plan for 6 years for side income

2017 Contribution: $120,000
Tax [email protected] 38%: $45,600
Projected DB Accumulation: $886,800
Annual DB Benefit: $71,500

SPOUSE HAS SELF-EMPLOYMENT INCOME

Objective: Invest earned income for retirement
Profile: Husband, age 61, has been earning $100,000 (after paying self-employment taxes) from a side business, which is supplemental to his wife’s income.
Solution: DB Plan for 5 years

2017 Contribution: $80,000
Tax [email protected] 38%: $30,400
Projected DB Accumulation: $463,800
Annual DB Benefit: $41,000

RETIRED CORPORATE EXECUTIVE,
CONSULTING FOR A FEW YEARS

Objective: Reduce tax hit and delay Required Minimum
Distributions (RMDs)
Profile: Self-Employed, age 69, earns $200,000 in W-2 income. She needs to begin taking distributions from her retirement plan this year, and wants to reduce her tax liability while she’s working.
Solution: DB Plan for 5 years with a 3-yr. cliff vesting
schedule, No RMDs from this plan until 2019
DB only DB + 401(k)

2017 Contribution: $143,500
Tax [email protected] 38%: $54,600
Projected DB Accumulation: $843,300

Learn more about our Small Business Retirement Plans

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