{"id":18208,"date":"2015-11-04T11:00:00","date_gmt":"2015-11-04T16:00:00","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/11\/business-report-defined-benefit-plan-is-back.html"},"modified":"2017-11-08T13:47:12","modified_gmt":"2017-11-08T18:47:12","slug":"business-report-defined-benefit-plan-is-back","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/11\/business-report-defined-benefit-plan-is-back\/","title":{"rendered":"Business Report: Defined Benefit Plan Is Back"},"content":{"rendered":"
\n
\n

\"steve\n<\/div>\n

\n

Stephen M. Kyne, partner, Sterling Manor
\nFinancial LLC, Saratoga Springs.\n<\/p><\/div>\n<\/div>\n

BY STEPHEN M. KYNE<\/p>\n

Are you a small business owner who wishes
\nyou could save more for retirement, and
\nget a bigger tax deduction than the $53,000
\ncurrently allowed in your Defined Contribution
\n(e.g. 401(k) with profit sharing) Plan? If
\nso, then you will be happy to know that there
\nare other options that could allow you to
\nmake more than $200,000 in tax-deductible
\nretirement contributions each year.<\/p>\n

Now that the economy has largely recovered
\nfrom the recession, many business owners
\nare finding themselves in an interesting
\npredicament:<\/p>\n

1. They’re six years closer to retirement,
\nand they’re afraid of another recession wiping
\ntheir savings away.<\/p>\n

2. Their businesses are running full-steam,
\nand they are finding themselves looking high
\nand low for tax deductions each year.<\/p>\n

3. They want to guarantee a pension for
\nthemselves in retirement to maintain their
\nstandard of living.<\/p>\n

For years, the go-to option for retirement
\nsaving has been the 401(k), and its similar
\ncounterparts, called Defined Contribution
\nplans. But, for business owners who need to
\nsave more, or who want to generate larger
\ntax deductions, the preferred option is the
\nDefined Benefit plan. Defined Benefit plans
\nhaven’t gotten much traction in recent years
\nsimply because many business owners didn’t
\nhave the income to shield from taxes.<\/p>\n

Today, business is back, and so is the Defined
\nBenefit plan.<\/p>\n

What is a Defined Benefit plan? In layterms,
\nit’s a pension. A Defined Benefit plan
\nallows you to determine how much income
\nyou would like, on a guaranteed basis, in
\nretirement, and then back into the total funding
\nlevel necessary to make that happen. You
\nliterally define your benefit. The higher the
\ndesired benefit, the higher the funding requirement,
\nand the more in the way of annual
\ntax-deductible contributions you can make.<\/p>\n

Would you like a guaranteed pension of
\nup to $210,000 in retirement? You can make
\nan annual tax-deductible contribution of up to
\n$260,000 to a Defined Benefit plan to make
\nthat happen. Those are the current limits.
\nOf course, a plan could be structured to
\nprovide less income, or accept lower annual
\ncontributions, and can be tailored to meet
\nyour specific needs and objectives. Don’t
\ncount yourself out just because you don’t
\nhave $260,000 annually to shelter from taxes.<\/p>\n

Defined Benefit plans can include different
\ntypes of investments depending on your
\ngoals. Your investment mix may depend on
\nwhen you want your plan to be fully funded,
\nor whether you’d like to maximize your deductible
\ncontributions.<\/p>\n

If you would like to fully-fund the plan
\nmore quickly, then using investments like
\nstocks and bonds may be right for you. Since
\nthese types of investments tend to appreciate
\nmore quickly, you may be able to fully-fund
\nthe plan in fewer years, with a lower total
\ncontribution.<\/p>\n

If maximizing your total tax deductions is
\nyour goal, then you may want to fully-fund
\nthe plan more slowly. The current low-rate
\nenvironment means that certain guaranteed
\ninvestments, like fixed annuities, may appreciate
\nmore slowly than stocks and bonds.
\nThat means it will take longer to fund the
\nplan, allowing you more in total tax-deductible
\ncontributions.<\/p>\n

To find out more about defined benefit
\nplans, and if one might be right for you and
\nyour business, be sure to consult with your
\nfinancial advisor and accountant. You have
\nuntil the end of the fiscal year to establish
\na plan, and until your tax filing deadline,
\nincluding extensions, to fund it. These plans
\nare highly customizable, so don’t miss an
\nopportunity to provide substantial benefits
\nfor you and your business!<\/p>\n

Kyne is a partner at Sterling Manor Financial
\nLLC in Saratoga Springs and Rhinebeck.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Stephen M. Kyne, partner, Sterling Manor Financial LLC, Saratoga Springs. BY STEPHEN M. KYNE Are you a small business owner who wishes you could save more for retirement, and get a bigger tax deduction than the $53,000 currently allowed…<\/p>\n","protected":false},"author":121,"featured_media":24502,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[58,70],"class_list":["post-18208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-reports","tag-business-reports","tag-financial"],"yoast_head":"\r\nBusiness Report: Defined Benefit Plan Is Back - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/11\/business-report-defined-benefit-plan-is-back\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Business Report: Defined Benefit Plan Is Back - Saratoga Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"Stephen M. 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