4 Retirement Objectives for your Small Business

Those who run small to moderate sized family businesses have a whole different set of considerations when it comes to retirement. You may not pay into a company provided 401k plan bi-monthly, but that doesn’t mean you shouldn’t have retirement on your radar. Consider these articles highlighting retirement objectives for owners of small businesses.

- Eric

The benefits of giving money away during your lifetime

Consider Big Gifts to Family This Year (from Wall Street Journal)

Current rules allow individuals to give away up to $5.12 million during their lifetimes without attracting any federal gift tax. A couple can transfer as much as $10.24 million. And the gift-tax exemption isn’t reduced by the annual gifts of up to $13,000 per recipient that individuals can make to reduce the taxable portion of their estates.

Run your family finances the same as you run your business

For Financial Success, Run Your Life Like A Business (from USNews)

I know that in the age of the 99 percent versus the 1 percent, the word “business” can sound like a four-letter word. But the reality is that we can all learn a great deal from successful businesses. All we have to do is apply those lessons to our personal lives. (This is true no matter what your political views are.) Let’s examine this to determine if you think the argument holds water.

Have an exit plan

Preparing to Leave (from Wall Street Journal)

Too many owners aren’t prepared for the day when they’ll need to cash out. Some haven’t done their homework to figure out what the business is really worth. Others undermine their company’s value with their inability to let go.

Be smart with your tax planning

Shielding the Family Business (from Wall Street Journal)

Our current system imposes a gift tax of up to 35% when taxpayers give assets away, with exceptions. Individuals now get one $5.12 million lifetime exemption, and they can also give up to $13,000 of assets a year to an unlimited number of recipients. (Next year the lifetime break is scheduled to drop to $1 million and the top rate to rise to 55%.)

This means an owner who wants to give a business to children or others, such as employees, can use these exemptions to transfer ownership tax-free. He can even use the $13,000 annual exclusion to transfer value bit by bit.

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About thebenefitblog

Eric is a Vice President at Lockton Insurance Brokers, Inc. He joined Lockton in 2005 specializing in Health and Welfare Benefits, Qualified & Non-Qualified Retirement Plans and Life Insurance for Business Planning. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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