Personal Retirement Plan (PRP)™

Happy Senior Couple Sharing an Audio Player OutdoorsMost business owners understand the need to have a retirement plan for their employees, so most owners implement a 401(k )or similar type plan. However, for the business owner, they want a plan designed just for them. But with a Qualified Plan like a 401(k) etc, the law says you MUST include all employees. Which is why so many business owners look to a NON Qualified Plan (NQP) for their retirement needs. An NQP gives business owners the flexibility and control they have longed for. Because it is a Non Qualified Plan, ERISA rules generally do not apply. So the owner can design their plan any way they choose. And, they can include or exclude anyone they choose. This, of course, is music to a business owners’ ears. For the funding vehicle, most NQP’s use a specific type of life insurance, and a specific design. Why insurance? Insurance is used because it provides 2 key advantages that no other asset class can provide: tax deferred growth on the assets and potentially tax FREE income to the owner. But don’t take our word for it. Look at these statistics: 86% of Fortune 500 companies have an NQP for their senior executives & a whopping 98% of those plans are funded with life ins. (Amercian Medical News, May 1996).The idea is, however, we don’t really care about the insurance. We just want the tax benefits the insurance provides. So with that in mind, the plan is designed with the minimum amount of insurance allowed by tax law. That way, the vast majority of the contribution going in goes toward growth with only a very small piece going to pay the actual cost of insurance. The proof is in the numbers.

So ask your business owner clients, “would they be interested in a plan that provided the following”:

 

  • Tax deferred growth on plan assets
  • The ability to exclude anyone from the plan
  • Potentially tax free income
  • Market based performance and investment choices
Chances are, you’ll get their attention and their interest. This is the solution so many business owners have been looking for, yet are completely unaware is available to them.