How Assets are Taxed

Taxed Now

CDs and Money Markets

Mutual Funds

Saving Accounts

Taxed Later

401(k) Accounts

403(b) Accounts

Traditional IRAs

Never Taxed

Roth IRAs

Cash Value Life Insurance

Plan Comparison


401k/Profit Sharing Plan

  • Before Tax Contribution – 100% taxable at distribution
  • ERISA Government Plans – Yearling 5500 reporting
  • Average 2.0% inside cost
  • Third Party Administration Charge – Quote from Qualified Plan Consultants in Jackson, MS
  • $500 Startup, $1,200 annual fee for compliance reporting
  • Cannot Discriminate – Owner/Manager can only put in 1% above rank and file employees unless you use a Safe Harbor Plan. 3% contribution to all employees allows you to put in $18,000 per year. Additional money can be put in with a Cross Testing Profit Sharing Plan
  • Plan may or may not include Loans and/or Hardships.
  • Employer contributions for employees may be vested for up to 7 years.
  • Employer contribution is tax deductible.
  • Assortment of subaccounts including find companies like Fidelity T. Row Price, Invesco, and Franklin. May include money market, growth, balanced, bond and international investing. May change investments daily. Investments have no ceiling or floor. Allocated accounts available as well.
    Would be subject to RMD’s at age 70 ½ and distribution are deemed as income and could affect social security taxation.
    Trustee of plan has fiduciary responsible and liability.

The Protection Plan

  • Non ERISA, non government plan
  • Simple agreement between Employer and Employee
  • Can discriminate at will
  • Distributions may be tax free through loans
  • Not deemed as income at distribution
  • Crediting Strategy Guaranteed at 0%
  • Expenses for policies clearly shown
  • Three Loan Options – standard, preferred, and participating – Loans go through company/agent
  • No TPA expense
  • No Annual Government Form
  • Life Insurance Contract – provides tax free death benefit with critical and chronic illness riders
  • No limit on contributions
  • Current cap rate at 13% with 100% participation rate

What Life Insurance Do You Need?

Check out our free calculator to see just how much life insurance you might need.