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Tax Savings Using Retirement Plans
For Physicians, Medical Clinics & Hospitals
Executive Benefits Design Group/A.R.I.S. Inc. Retirement Planning for Physicians
Recent changes in laws affecting retirement plans take effect in 2008. The changes increase the available options for all taxpayers; however, physicians and other professionals are uniquely suited to take advantage of these new opportunities.
The U.S. Department of Labor reports that eight of the ten highest-paying jobs belong to health-care professionals. However, the substantial compensation is usually accompanied by significant student loans and expensive equipment costs. Many physicians find themselves spending the first years of their careers with high expenses and little left to plan for retirement. This delay in retirement planning means that the plans must be funded over a far shorter time.
In addition, physicians are the focus of financial advisors more concerned with their financial well-being than the client’s. They tout the can’t miss stock, tax shelters, real estate investments that may be very profitable, or not. Further, these investments are subject to judgment awards from lawsuits, adding to the risk.
Now that’s where we come in.
We offer computer based optimal plan designs for medical professionals. The plan retirement benefits are guaranteed by a major insurance carrier. What sets us apart is our expertise and our exclusive focus on serving professionals and physicians. Our capabilities are driven by an all in-house team of financial talent, experienced and credentialed in the tax, legal, actuarial and accounting professions. We use this knowledge to design a plan which will help you reach your goals most efficiently. We believe that retirement planning delivered through our experienced team, maximizes your ability to reap the rewards your practice has earned you. We welcome the opportunity to deliver a custom retirement plan that helps you meet your financial goals and objectives.
We publish a quarterly newsletter highlighting the concepts and developments you need to know to succeed in this market. Our staff of CPAs, tax attorneys, and administrators are online daily to address retirement planning issues.
We invite you to contact us with any questions. Most communication can take place through the internet or by fax or telephone Our initial plan design is complementary for you to review to see if it fits your needs.
Please email nick@ebdgonline.com
A well-balanced retirement plan hinges on identifying the retirement plan structure that best suits your practice. An appropriate structure allows physicians to effectively protect their assets from lawsuits, maximize allowable income tax deductions and accumulate adequate retirement assets. Such considerations are assesses by your Executive Benefits Design Group (EBDG)Advisor, who will collect the information necessary to help you create the optimal retirement plan. Our actuaries use computer based proprietary programs that can optimize your retirement assets by reducing your taxes and employee expenses.
The Pension Protection Act 2006 changed plans dramatically. These changes increased physicians’ retirement savings opportunities, and removed restrictions that previously reduced such accumulations. In our opinion, this important regulatory and policy shift has resulted in an unprecedented opportunity for physicians to boost pre-tax deductions in a qualified retirement plan - and we are poised to assist you in this regard. How? We have the expertise to show qualifying physicians how to contribute up to $200,000 or more per year of tax-deductible net practice earnings to IRS-approved retirement plan. This translates into the ability for you to contribute tax-deductible dollars to build more than $2 million in pension plan assets that can later be rolled over into your IRA for retirement or provide lifetime income for your retirement.
Our experienced, credentialed advisors will present the alternatives available for you to reach your goals. The legislative changes brought more flexibility, and increased the available options. You choose the plan that best suits your needs.
Sound risk management strategy provides physicians with the peace of mind to focus on patient care, and confidence in the knowledge that the most suitable mechanisms have been put in place to secure future practice income, in case of unexpected events.
The Right Plan, the Right Way
What sets us apart is our experience serving physicians; and the fact that our integrated planning methodology is focused on your financial life in its totality, making each component of your plan a significant contributor to your overall financial health. Best of all, our expertise will help ensure:
• the plan can be funded with tax deductible dollars - making the most of your earnings
• the plan earns tax deferred income toward your retirement - moving you closer to financial independence
• the plan is exempt from lawsuits and creditor claims
• the plan is a Qualified Plan under ERISA
• the plan benefits are guaranteed by a major insurance company
The first step is to schedule an appointment for one of our advisors to conduct a thorough assessment of your current financial situation by calling (360) 756-0776 or email us at nick@ebdgonline.com
Executive Benefits Design Group designs and A.R.I.S. Inc., our sister company, administers a variety of sophisticated fully insured defined benefit plans and 401(k) profit sharing plans to help you respond to today’s economy.
Our specialists apply quantitative mathematical modeling to systematically administer various types of plans to minimize taxes and maximize retirement assets using cross-tested combination plans.
In addition, our consultants are a carefully selected group, each of whose specialty, experience and standing uniquely qualifies them to provide an attentive ear, leadership and advice to their peers in financial matters. We can show you structural alternatives for the future business needs for your practice.
Our online services allow you to access your 401(k) accounts throughout the internet. Questions on your defined benefit plan can be answered online by our actuaries and pension professionals to improve your tax savings and meet your financial goals.
• 70,000 lawsuits are filed each day, many without merit.
• The average medical malpractice award is $3.9 million
• The average legal cost of settling a frivolous lawsuit is $91,000 plus the actual settlement amount itself.
• The average sexual-harassment suit against a small business can produce an award in excess of $500,000. Employees are suing more often, winning more often and winning proportionally larger judgements. They win 75 percent of the time. Source - Advisor Today, February 2008
Qualified plans are exempt from lawsuits
Sample 412(e)(3) Custom Carve-out Plan
DATA SUBMITTED BY DR. SMITH
SMITH MEDICAL CENSUS
| Participant Name | Compensation | Age |
|---|---|---|
| Dr. Smith | $200,000 | 55 |
| Dr. Jones | $200,000 | 50 |
| Amy Zucker | $40,000 | 45 |
| Beth Unizker | $30,000 | 40 |
| Charles Taylor | $25,000 | 35 |
| Will Stewart | $20,000 | 30 |
| David Sopk | $20,000 | 25 |
| Ely Richards | $20,000 | 21 |
Results for Dr. Smith
SMITH MEDICAL CUSTOM CARVE-OUT PLAN
| Participant Name | 401(k) Plan | 412(e)(3) Plan | DBEBAR | DCEBAR | 401a4EBAR |
|---|---|---|---|---|---|
| Amy Zucker | - | $3,239 | 2.00 | - | 2.00 |
| Beth Unizker | - | $1,580 | 2.00 | - | 2.00 |
| Charles Taylor | - | $897 | 2.00 | - | 2.00 |
| David Sopk | $1,000 | - | - | 8.66 | 8.66 |
| Dr. Jones | $10,000 | - | - | 1.13 | 1.13 |
| Dr. Smith | - | $152,416 | 8.00 | - | 8.66 |
| Ely Richards | $1,000 | - | - | 8.66 | 8.66 |
| Will Stewart | - | $503 | 2.00 | - | 2.00 |
Total Contributions to both plans $170,635.00
Key Group $152,416.00
Finding the optimal plan design for you!
The changes in the tax law have created the largest single deduction since mortgage interest - $425 Billion for contributions to qualified plans under ERISA - to benefit American businesses.
What is a Custom Carve-out Plan? This is an optimal plan design based upon demographics and desires of the employer. It uses two plans to achieve a design that is attractive to most employers. Data is critical as pension contributions are based on compensation, age and service.
What type of plan designs are available? From this data, various plan designs can be used: a fixed harbor plan, a unit credit safe harbor plan, a 2-step unit accrual, a tiered benefit formula, a tiered benefit formula with a flat dollar accrual, a plan that accounts for past service considerations, a cash balance plan, etc.
We look forward to making your acquaintance.
Sincerely,
Nicholas A. Paleveda, MBA, JD, LLM,
President and CEO