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A Rocket Booster for Retirement Planning

August 19, 2021
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One tax advantaged retirement tool for small, medium, or large medical practices is the use of 401K Overlay or ‘Mirror Plans’ for the exclusive benefit of the Key Person, or Ownership Group.  These plans do not require IRS approval, have no Required Minimum Distribution (RMD) Rules, and currently have no contribution limits.  For high wage earners, this allows a reduction in current income tax, immediate vesting of all deferred income, and the practice can also make contributions – matching or not. 

Based on 2021 maximum contribution limits for traditional 401(k) plans, a physician earning $150,000 can save only 13% of their salaries, hardly enough to generate the 70-90% of their income that experts say will be needed at retirement.  The solution is possibly a form of Deferred Compensation using the Overlay/Mirror Plan.  This design is flexible - these programs can potentially fund other practice goals along with closing the Retirement Income Gap.  This represents an opportunity to ensure and reward loyalty.

We design voluntary, ‘Golden Handcuff’, or hybrid versions of this plan to accomplish specific goals for your practice.  The plan grows tax deferred, could reduce current income taxes, no limits on contributions, flexibility to select who receives the benefit, ability to customize terms to each participant, potential to recoup plan costs if desired, and no required minimum distribution.

We recommend that you contact us to learn more about how Medical Practices, Banks, Insurance Companies, and Law Firms use non-qualified benefit programs to attract and retain top talent, defer taxes and income into the future, no IRS approval, and free from the restrictions and contribution limits of qualified retirement plans.

 

 

Ben Feigenbaum has worked with Medical Practices for over 35 years.  He partners with Investment, Insurance, Attorneys and CPAs to assist growing Medical Practices.  Ben has worked closely with Medicus Wealth Consultants since their inception to customize programs that enhance and protect the Medical Professional.

The foregoing information was prepared from sources believed to be reliable but is not guaranteed as to accuracy and is not a complete summary or statement of all available data. Please consult your tax advisor regarding your specific situation prior to implementing any of the strategies discussed.

Registered Representative of, and Securities and Investment Advisory Services offered through Hornor, Townsend, and Kent, LLC (HTK).  Registered Investment Adviser, Member of FINRA/SIPC.  6000 Fairview Dr, Suite 1425, Charlotte, NC 28210  704-362-6787  Medicus Wealth Consultants, LLC is unaffiliated with HTK.  Medicus Wealth Consultants and HTK do not provide tax or legal advice. 

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