The Business Owner’s Bonus Plan

Are you a business owner?

Is your business organized as an S corporation, partnership, or LLC?

If so, you probably have a big question on your mind: “What about me?” As a business owner, you spend time, money, and other resources to build your business. This includes the costs of recruiting, rewarding, and retaining key employees. But eventually you need to think about yourself and start saving for retirement.

“What About Me?”

Perhaps you have already helped some of your key employees prepare for retirement by offering supplemental benefits such as nonqualified deferral plans or salary continuation benefits. Or maybe you have offered your key employees 401(k) Look-Alike Plans or some sort of split dollar benefit. But as the owner of a “pass through” entity (S corporation, partnership, or LLC), you have been told that these arrangements are not available to you. So after helping your key employees save for retirement, you ask again: “WHAT ABOUT ME?” The answer to “What about me?” is the Business Owner’s Bonus Plan. The Business Owner’s Bonus Plan is personally owned benefit plans which can help small business owners create a tax-efficient source of supplemental retirement income.

Potential Benefits

The Business Owner’s Bonus Plan uses life insurance purchased with after-tax funds to provide both death benefit protection and cash value accumulation which can be used to supplement the business owner’s retirement income. This arrangement can be an effective strategy for providing a tax-efficient source of supplemental retirement income along with death benefit protection for the business or the owner’s family.

The Business Owner’s Bonus Plan can provide the following potential benefits for the business owner:

• 
  Supplemental Retirement Income – Bonuses are used to purchase a life insurance policy which accumulates cash values.



• Tax-Deferred Growth – No income tax is payable while money is accumulating inside the life insurance policy.



• Tax-Free Income1 – Provided the life insurance policy is not structured as a modified endowment contract (“MEC”), the business owner will be able to attain tax-free income through a combination of policy withdrawals and loans.



• Income Tax-Free Death Benefit2 – The life insurance policy provides protection for the executive’s family in the event of death.



• No IRS Distribution Requirements or Penalties – Distributions from a Business Owner’s Bonus Plan can occur before age 59 ½ without a premature distribution penalty from the IRS, and there are no required minimum distributions at age 70 ½ or thereafter.

Contact us for additional information: 800-334-7875 or email info@amsinsure.com