For high-income business owners, the challenge isn’t just building wealth — it’s preserving it. Strategic planning during both the accumulation and retirement distribution phases is essential for optimizing savings and minimizing tax burdens.
At LIFE Brokerage, we provide two independent strategies to help business owners with minimizing taxes in retirement and grow assets efficiently:
1. Cash Balance Plans: A powerful way to maximize tax-deductible retirement savings during your working years.
2. The Retirement Tax Minimization Strategy (RTMS): A planning tool for optimizing withdrawals, reducing required minimum distributions (RMDs), and minimizing taxes in retirement.
Both strategies leverage our expertise in tax-efficient wealth strategies and a common third-party administrator to ensure smooth implementation.
Cash Balance Plans: Maximize Tax Savings While Building Retirement Wealth
What Is a Cash Balance Plan?
A Cash Balance Plan is a tax-qualified retirement plan that allows business owners to contribute significantly more than a traditional 401(k) while enjoying substantial tax savings. Contributions are tax-deductible, providing immediate reductions of $100,000 to $300,000 or more per year while helping business owners with minimizing taxes in retirement.
Key Benefits of a Cash Balance Plan:
- Significant Tax Deductions: Large pre-tax contributions lower federal and state tax burdens.
- Accelerated Retirement Savings: Enables high earners to build substantial retirement assets quickly.
- Flexible Plan Design: Can be customized to align with business and personal financial goals.
This strategy is particularly beneficial for business owners who need to reduce taxable income while maximizing long-term retirement savings.
Retirement Tax Minimization Strategy (RTMS): Managing Tax Burdens in Retirement
What Is RTMS?
The Retirement Tax Minimization Strategy (RTMS) is a separate strategy designed for business owners and high-net-worth individuals who want to minimize the tax impact on their pre-tax retirement assets.
By strategically repositioning assets, RTMS helps mitigate the effects of RMDs, rising tax rates, and estate tax burdens. This is particularly useful for individuals with significant IRA or 401(k) balances who want to enhance their financial flexibility in retirement.
How RTMS Works
RTMS involves funding a life insurance policy inside a qualified plan using pre-tax dollars and later repositioning the policy into personal or grantor trust ownership. This approach:
- Reduces forced taxable withdrawals by lowering RMD exposure.
- Minimizes future tax burdens by decreasing taxable IRA withdrawals.
- Increases after-tax retirement income through tax-advantaged life insurance strategies.
- Enhances estate planning by providing tax-free wealth transfers to heirs.
Who Benefits from RTMS?
RTMS is especially valuable for:
- High-net-worth individuals with over $1 million in qualified retirement assets.
- Corporate executives with large 401(k) or IRA balances who want to reduce RMD exposure.
- Business owners looking to optimize tax efficiency while increasing after-tax retirement wealth.
By strategically implementing RTMS, business owners can reduce taxable income in retirement, optimize wealth transfer, and increase financial flexibility.
Work With Our Experts to Minimize Taxes in Retirement
LIFE Brokerage specializes in advanced tax minimization strategies for retirement, tailored to high-income business owners and professionals. Whether you want to maximize pre-tax contributions with a Cash Balance Plan or reduce tax burdens on retirement withdrawals using RTMS, our team provides the expertise to design and implement these strategies effectively.
Why Work With LIFE Brokerage?
- Multi-Carrier Expertise: We partner with the top financial carriers to provide the best funding options and plan flexibility.
- Optimized Plan Design: Our customized approach ensures the best structure for business owners, executives, and professionals.
- Regulatory Compliance: We work with a trusted third-party administrator to ensure all plans meet IRS guidelines.
- Proven Valuation Confidence: Our deep financial modeling and plan valuation expertise allow us to offer data-driven insights.
- Personalized Guidance: Every business is unique, and we provide tailored one-on-one consultations to align strategies with your financial goals.
Take Control of Your Financial Future
With proper planning, business owners and high-income professionals can significantly reduce tax liabilities, increase retirement savings, and preserve more wealth for future generations.
Schedule a consultation today to learn how LIFE Brokerage can help you implement tax minimization strategies tailored to your financial goals.