HOW WE'VE HELPED PEOPLE LIKE YOU!
The owners of a small, successful dental practice wanted a way to defer even more of their salaries for retirement. SVA Plumb created a unique, cost-effective solution tailored specifically to their ages and business.
The owners of the practice approached SVA Plumb because they needed a way to deal with their success. In their 30’s and 40’s, the doctors were still far from retirement and each were earning a yearly salary that averaged over $250,000. At that level, the owners each wanted to put more of their money towards retirement, allowing them to take advantage of the tax incentives of deferment and plan for their futures.
Their practice had a 401(k) plan and a profit sharing program in place, and for most businesses, those are the only options many advisors consider. However, the small business retirement specialists at SVA Plumb were able to design a retirement plan tailored towards the size of the business, its owner-to-employee ratio, the owners’ ages and their retirement goals.
In their analysis, the SVA Plumb advisory team found that using an age-weighted calculation, the amount of profits the owners could contribute to their 401(k) plan was even higher than the typical IRS limits, giving the dental practice owners even more flexibility with no added costs. But the most impactful part of the plan was the creation of a cash-balance defined benefit plan. This plan allowed the doctors to defer $160,000 into a separate retirement plan, as well as offering an added benefit to all of their employees.
Today their business continues to grow, and SVA Plumb advisors meet with the owners periodically to talk about any changes and updates. As the business evolves, so will the retirement plan. As some dentists get closer to retirement and others come aboard, SVA Plumb will continue to monitor and modify the plan so it remains a successful financial tool.
“A lot of business owners are surprised that they can contribute $250,000 or more a year to their retirement funds. They had no idea the numbers could be that high. The amount depends on a lot of factors and demographics, but we know the ins-and-outs of retirement business planning to maximize retirement contributions while minimizing costs.”