Business Owner Retirement Planning

What steps are you taking to Retain, Reward and Recruit high-caliber talent to your company?

An Executive Bonus Plan is a simple and effective way to provide supplemental benefits to your most valuable employees.

Benefits to your executives:

• Their beneficiaries receive an income tax-free death benefit¹
• They can take supplemental retirement income through withdrawals²
• Policy values may be protected from their creditors, depending on state law
• There are no penalties for early withdrawal
• It is fully portable -- they can take it with them if they leave the company
• They own and control the policy and its underlying investments

Benefits to your company:

• Supports your goal to recruit, reward and retain high-caliber talent
• The plan is simple to set up and administer
• Several flexible design options are available
• You select the participants
• This plan may be made available to any employee with minimal ERISA concerns
• Premium payments may be deductible expenses under IRC 162

1. Death benefits are generally excludable from the beneficiary's income for federal income tax purposes.  In certain situations, however, the death benefit proceeds may be partially or wholly taxable.  Such situations include, but are not limited to, certain arrangements in which a life insurance policy is transferred for valuable consideration.

2. Gains in excess of basis are taxable in the event of a surrender, lapse or policy maturity.  If the policy is classified as a Modified Endowment Contract (MEC), policy loans, withdrawals or other distributions of income (gains) will be taxed as ordinary income and distributed first, followed by basis in the contract.  Distributions of income (gains) prior to 59 1/2 may be subject to a 10% tax penalty, in addition to ordinary income tax.  Surrender charges may also apply.

Policy loans and withdrawals will reduce cash value and are subtracted from the death benefit upon payment.