Business owners have a unique set of needs for their financial planning. Many business owners spend their time, capital, and energy building their business while minimizing time on their personal finances. Our advisors work with business owners to ensure they devote some of their time planning their personal financial future.

Developing a balance between business goals and personal financial goals is a priority for business owners to be successful. We work to make sure that retirement plans, estate plans, buy-sell agreements, and a plan for business succession are all part of your overall plan.

#1 Protect Your Business

Business owners work hard to establish their companies, so it is crucial to cover all the possible scenarios to protect this investment. At Integrated Capital Management, we understand the complexities of businesses owned by one or multiple partners. Our mission is to protect your business assets in order to ensure future success, regardless of what unexpected events occur.

Situation

Jake and Ron are 50/50 owners of a successful company. They contacted Integrated Capital Management when Ron was involved in a serious single-car accident, where he escaped injury. The partners wanted a plan to protect their company in the unfortunate case that one of them were to die. Their concerns included what would happen to the deceased’s share of the business and how the remaining owner would move forward with the business.

Solution

The Integrated Capital Management advisor showed Jake and Ron how a Buy/Sell legal agreement is designed to protect their business and help the family of the deceased owner. This type of agreement spells out the conditions for sale of the company upon the death or disability of one of the owners and provides a plan for continuation of the business. The advisor explained how the family of the deceased is also provided financial protection under this plan. The partners agreed on the plan, and it was funded through life insurance policies on each business owner. Under the plan, the purchase of the company from the deceased’s estate will be easily facilitated from the proceeds from the life insurance. After working with Integrated Capital Management Jack and Ron have peace of mind that there will be a smooth continuation of their business if tragedy strikes.

For illustration purposes only. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy recommended will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. ICM and its affiliates do not provide tax, legal or accounting advice. Any information presented here is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

#2 Pick the Optimal Retirement Plan

Independent business owners require special financial considerations. At Integrated Capital Management, we create financial plans for your specific circumstances to ensure a bright financial future.

Situation

Marie is a successful automotive engineer who has decided to start her own business. Since leaving her employment at a large manufacturing company, she no longer has a workplace retirement plan. Marie came to Integrated Capital Management to investigate which type of retirement plan she needs for herself and her three employees.

Solution

Marie’s Integrated Capital Management advisor explained that because she plans to hire employees, it is more advantageous to set up a 401(k) plan for the whole group, instead of a Solo 401(k) or SEP plan. This option reduces her overall funding liability for her employees while maximizing the contribution limits of the plan. Her advisor set up a 401(k) Safe Harbor profit sharing plan for Marie which allows her to save the maximum contribution of $58,000 and reduce her tax liability. Additionally, by providing a 401(k) plan with profit sharing, employee retention is improved which allows for smooth operation of her business.

For illustration purposes only. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy recommended will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. ICM and its affiliates do not provide tax, legal or accounting advice. Any information presented here is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

#3 Financial Tools for Business Optimization

At Integrated Capital Management, we develop strategies for ensuring the financial success of your company. Regardless of what type of business you run, we have a financial tool that will optimize your business.

Situation

Elliot is a well-established self-employed family attorney. A little over eight months ago, he left the large law firm he had worked at for 10 years and is now operating as the sole proprietor of his own business. He came to Integrated Capital Management for direction on how to structure his business finances to maximize retirement savings and minimize tax liability.

Solution

Integrated Capital Management paired Elliot with an advisor who suggested a SEP IRA. This type of IRA allows him to contribute up to 20% of his net income to the IRS allowed maximum of $58,000 per year. The SEP IRA also reduces his taxable income, providing additional benefit. Elliot is now moving toward his best financial future.

For illustration purposes only. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy recommended will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. ICM and its affiliates do not provide tax, legal or accounting advice. Any information presented here is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

#4 How to Optimize your 401(k) Plan Design

Business owners are continually looking for ways to improve their bottom line while attracting and retaining employees. The 401(k) plan strategies we use at Integrated Capital Management are tailored to each business owner’s situation.

Situation

Janet is the owner of a business that has just hired five additional employees. She came to Integrated Capital Management to find out if the current 401(k) plan she offers her employees is allowing her to maximize contributions and minimize tax liability. The current plan allows for a company match of 3% of compensation and employees can contribute a maximum of $19,500 per year (or $26,000 if they are 50 or older). The plan offers no profit sharing.

Solution

Janet’s advisor at Integrated Capital Management evaluated the options available to her based on company size and employee demographics. The optimal 401(k) plan design that Janet and her advisor agreed upon was a 401(k) Safe Harbor profit sharing plan. This plan allows Janet to contribute a maximum of $58,000 per year through profit sharing. Additionally, by offering profit sharing to her employees, employee turnover has reduced, lowering Janet’s operating costs. Janet also reduced her tax liability through this plan and approximately 70% of total contributions benefited her as the business owner.

For illustration purposes only. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy recommended will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. ICM and its affiliates do not provide tax, legal or accounting advice. Any information presented here is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Properly coordinated planning is one way to protect the business, yourself, and your family from unforeseen events. Schedule time with one of our advisors to see how we can assist you in your planning.

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