Financed Retirement Plan
Main Advantages of a Financed Retirement Plan
Provides Vehicle to Enhance or Jump Start Retirement Savings (even if you're late in starting)
Selective Benefit Without Huge Cash Outlays
No Conflict with Current Retirement Plans
Life Insurance Protection
Contributions Compound Tax-Free
No Loan Guarantee
No Loss of Plan Cash Value (0% Floor protects vs index declines)
Tax-Free Withdrawals of Policy Cash Value*
Excellent Tool to Recruit & Reward Key Employees
Monies May be Protected from Creditors*
Ideal Participant: Age 30-50 / Healthy / 15 year time horizon
Contact Us to Get More Information and See How a Financed Retirement Plan Could Benefit You.
*Please note:
All concepts, strategies, and products mentioned may not be suitable for you or your company. Information provided is not intended to be legal or tax advice. Please consult with your tax and legal advisor for specific tax questions. For Financed Retirement Plans, the policy remains in collateral assignment with the lender until the loan is fully paid.
*Receipt of benefits depends on policy rider(s) and meeting certain qualifications (varies by state). The use of one benefit may reduce or eliminate other policy and rider benefits (and not all riders are available by all life insurance companies). Payment of living benefits will reduce the policy cash value and death benefit. Substantial tax ramifications could result upon contract lapse or surrender.
Surrender charges may reduce the policy’s cash value in early years. It is possible that coverage will expire when either no premiums are paid following the initial premium or subsequent premiums are insufficient to continue coverage. This strategy is dependent on the employer making contributions for the first 5 years and not defaulting on the policy, which could result in policy lapse and surrender charges. The employee will not have access to the policy, the cash values, the death benefits or the living benefits until the loan is repaid and the assignment is released. The lender has the right to discontinue funding new premiums, exit the market, or to demand loan repayment based on the terms and conditions signed under the Master Trust. See the Master Trust documents for additional information. Receipt of accelerated benefits may be taxable and may affect eligibility for public assistance programs. This information is not intended as tax advice. Please consult with your tax advisor regarding your own situation.
A Strategy for Recruiting, Rewarding, & Retaining Key Employees, Owners, and Executives
This is an ideal solution for companies looking to hire, retain, and substantially reward key employees without dramatically expanding current employee benefits and adding undue financial exposure.
What is a Financed Retirement Plan?
A Financed Retirement Plan (sometimes called a Kai-Zen Plan) utilizes leverage to provide protection, tax-free growth, and access to cash (a potential tax-free retirement income stream) for specific key employees via an index life insurance policy.
What Sets This Apart vs other Premium Finance Strategies?
1, 3 to 1 Leverage: Employers pay the 1st 5 premium payments - Bank pays remaining 10 premium payments (via a "loan" arrangement)
2. No Loan Guarantee: Bank funding secured by death benefit and policy cash value