When operating a smaller business funds are tight and you want to make sure that they are put to good use. One way to keep these employees is the promise of stock and rewards for Initial Public Offerings. However, IPO’s are happening at an alarming decreasing rate year over year, although the previous year of 2014 and currently in 2015 IPO’s have spiked, but they were at an all-time low in 2011 so spiking is not coming from much.
What if you rewarded or gave the opportunity to your employees through a non-qualified sponsored plan that helped them grow and save beyond the normal 401(k) and allowed them to have a piece of the future secured. In addition, what if you stated you would contribute to this plan if you hit certain goals above your normal bonus structure? This might be a plan that allows for that retention without the promise of the company success.
This is what is called the Million Dollar Club. Here is a brief outline of the Million Dollar Club and an example.
Million Dollar Club:
Business Owner à $ Key Person à Life Insurance à Tax Free withdrawals in Retirement
- Deferral dollars
- Grow income Tax Free with Income Tax free withdrawals
- Additional Benefit of Life coverage
- Potentially non-attachable depending on ownership
- Non-Qualified Plan – no ERISA restrictions
- Money tied up for minimum seven Years
- Must continue to fund (funding can be variable) to get maximum results
- Investments are limited to 60 selections
- Interest rate variability
- Since Life insurance based on health and age to set pricing
- Business Owners
- Small Businesses with Key Employees
- Highly compensated Individuals
- Individuals with potential for high malpractice or lawsuits
40 Year old Male, Standard Non Tobacco (In $) Guaranteed Values, based on 2,500 a month in funding
High Early Cash Value
Are you ready to develop a million dollar advance for your employees?
Rodney Mogen, is the president of solveurpuzzles, a business focused company. Solve ur puzzles helps three groups: Small Businesses, Financial Advisors/Agents (fixed business only), and Local Government Entities. Rodney is also a small business coach focused on developing strategies for small business owners and helping them develop their own strategy and ideas to grow, sell, develop the way they want. He is focused on creating proper strategies for Advisors and business owners to assist them in their day to day duties by solving their puzzles.