• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
2012 roubik retirement presentation
 

2012 roubik retirement presentation

on

  • 290 views

Small Business Retirement Presentation Maricopa SBDC 9-2012

Small Business Retirement Presentation Maricopa SBDC 9-2012

Statistics

Views

Total Views
290
Views on SlideShare
290
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • SBDC history– offeringWhy would a SBDC counselor need to address retirement?American businessman vacationing in small coastal Mexican village.Sitting at the pier, a small boat docks. Several large yellow-fin tuna.American complimentsthe Mexican on the quality and asks how long it took. American: why didn't he stay out and catch more fish? Mexican fisherman: So I can sleep late, play with my children, take siesta with my wife, stroll into the village each evening, sip wine, and play the guitar with my amigos. Because, I enjoy my full and busy life, senor." The American scoffed, "I am a Harvard MBA and could help you develop a great fishingbusiness. If you spent more time fishing, caught extra fish to sell -- buy a bigger boat. Profitsfrom the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats.Then, work to cut out middleman and sell directly to the processor.Own cannery. You would control the product, processing and distribution.Then, move to Mexico City, then LA and eventually NYC where you could increase your expanding enterprise." How long will this all take?" To which the American replied, "15-20 years.""But what then, senor?" asked the Mexican. The American laughed, and said, "That's the best part! IPO and sell your company stock to the public. Very rich, you would make millions!“"Then you could retire-- move to a small coastal fishing village-- sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.“Subconscious, reciprocal affect on your business. Need to get to root of your goals.
  • ONE THING: Goals dependent on the stage of your business. Love using Space Shuttle analogy.
  • Attendance reflectsAmerican’s view of retirement: Entitlement. Deny getting older and fail to plan for it– BABY BOOMERS! Warren Buffet –82!!!!Change your view of retirement a little. Not entitled– social security system, stock market declines. Don’t plan– big difference between champagne and beer. Plan to work– something can happen.
  • Fancy drink umbrellas– Federal program – threats of budget sequestered.
  • 72-76 million of the US population. 10,000 hitting 65 every day. 20-25% of the population over 55 by 2020.
  • Business Finance Store, Guidant Financial, IRA Financial Group

2012 roubik retirement presentation 2012 roubik retirement presentation Presentation Transcript

  • A Business Owner’s Flight Plan for RetirementDebra RoubikBusiness AnalystSmall Business Development CenterSeptember 5, 2012
  • A Business Owners Flight Plan forRetirement Inevitable Phases of a Business Owner
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing
  • A Business Owners Flight Plan forRetirement Inevitable Phases of a Business Owner Need a Plan to Reflect the Stage you are in!
  • Why Be Concerned About Retirement?
  • Why Be Concerned About Retirement?
  • Why Be Concerned About Retirement? OR
  • Why Be Concerned About Retirement?“IRA ownership rate for business owners is only about 36 percent, and onlyone-third of business owners with an IRA contributed for the 2005 tax year.Less than 2 percent of business owners own a Keogh plan. Only about 18percent of business owners participated in a 401(k)/Thrift plan.”--Small Business Administration, Office of Advocacy Recession has exacerbated a lack of retirement savings as business owners have been forced to withdraw funds to keep afloat My experiences as a business owner and financial analyst
  • A Business Owners Flight Plan for Retirement Launch PhaseDid you know that you may be able to use your current retirement fundsto invest in your own company? o Take a loan against the funds– Restricted according to your fund o Cash out the funds– Penalties, taxes and loss of retirement savings o Investment Retirement Financing
  • A Business Owners Flight Plan for Retirement Launch PhaseRetirement Investment Financing o CURRENT 401(k) or IRA o Balance of over $50,000
  • A Business Owners Flight Plan for Retirement Launch Phase
  • Risks Do this wrong and you risk paying taxes on your retirement savings as well as facing hefty penalties. Be very cautious about using your nest egg for a business start-up. You could lose it all! Fees for setting this up run as much as $5,000. Such investments fall into a gray area of the law, according to tax experts. So, consult with a tax attorney or a company specializing in this type of funding.
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Pre-launch and launch support is gone. So, the goal is to control expenses and focus on increasing sales. o Lack of time, funds.
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Payroll Deduction IRA o Payroll Deduction Roth IRA o SEP (Simplified Employee Pension) IRA o Profit Sharing
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Payroll Deduction IRA • Limited to $5,000 • No incentives to employees to hang on and help grow the company or increase profits o Payroll Deduction Roth IRA o SEP IRA o Profit Sharing
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Payroll Deduction IRA o Payroll Deduction Roth IRA • Taxes paid on contribution– not when withdrawn o SEP IRA o Profit Sharing
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Payroll Deduction IRA o Payroll Deduction Roth IRA o SEP IRA • All employees over 21 who have worked 3 out of the last 5 years and earned over $550 a year are eligible • Contributions flexible, but must be same percentage of compensation • Employees can still add up to $5,000 a year to another IRA account • No paperwork or testing o Profit Sharing
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters o Payroll Deduction IRA o Payroll Deduction Roth IRA o SEP IRA o Profit Sharing • DISCRETIONARY contributions • Flexibility • Vesting can be formulated to retain employees during tumultuous times
  • Costs of Profit Sharing Fees for trustee, service administrator. Nondiscrimination testing: Cannot treat higher-performing employees different from rank-and-file. But, you can base the contributions on percentage of income. Must be diligent with documentation.
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting o Solid growth rates o Standardizing procedures
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting o SIMPLE (Savings Incentive Match Plan for Employees) IRA o 401(k)
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting o SIMPLE (Savings Incentive Match Plan for Employees) IRA • Can be a SIMPLE IRA or SIMPLE 401(k) • Must have less than 100 employees earning at least $5,000 and no other retirement plan • Employer either MATCHES salary deferrals of employee following a legal formula or contributes a non-elective 2% of compensation • No nondiscrimination or top-heavy testing for SIMPLE IRA. But, form 5500 must be filed for SIMPLE 401(k) o 401(k)
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting o SIMPLE (Savings Incentive Match Plan for Employees) IRA o 401(k) • .A salary-reduction program for employees • Flexibility in picking contributions by employer (Profit sharing or matching)
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing o Defined Benefit Plan o 412 Plan o Self-directed IRA o Employee Stock Ownership Program
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing o Defined Benefit Plan • Provides for specific amount at retirement • Contribution based on actuarial assessment of eligible employee’s ages, salaries and interest rate environment • Contributions could be high o 412 Plan o Self-directed IRA o Employee Stock Ownership Program
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing o Defined Benefit Plan o 412 Plan • Must be funded in annuities and life insurance • Better for highly taxed, profitable companies o Self-directed IRA o Employee Stock Ownership Program
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing o Defined Benefit Plan o 412 Plan o Self-directed IRA • Allows owner to make own investment decisions in non- traditional markets o Employee Stock Ownership Program
  • A Business Owners Flight Plan for Retirement Launch Phase Separation from the Solid Rocket Boosters Orbiting Landing o Defined Benefit Plan o 412 Plan o Self-directed IRA o Employee Stock Ownership Program • Not a good program for the business owner, but a great way to “pass down” the company for exit planning • Employees retirement not diversified • Costs at least $40,000 to set up
  • SummaryGreat source to navigate your choices:IRS Retirement Plans Navigatorhttp://www.retirementplans.irs.gov/
  • References http://www.businessmoneytoday.com/bootstrapping/retirement- funds.php http://guides.wsj.com/small-business/funding/how-to-tap-an-ira-or- 401k-to-help-fund-a-start-up/ http://www.dol.gov/ebsa/pdf/profitsharing.pdf http://www.sba.gov/advocacy/7540/12260