Beyond 401(k)s for Small Business Owners A Practical Guide to Incentive, Deferred Compensation, and Retirement Plans

by Sifleet, Jean D.

• ISBN13: 9780471272687
• ISBN10: 047127268X
• Edition: 1st
• Format: Paperback
• Copyright: 2003-10-13
• Publisher: Wiley

Summary

The ultimate reference on compensation for small business ownersBeyond 401(k)s for Small Business Owners presents strategies for reducing taxes, planning for your retirement, and rewarding high-performing employees. Expert advice from attorney and CPA Jean Sifleet will help small business owners maximize their own rewards and create an environment in which employees know that their hard work will mean a better future for themselves.In clear, simple language this book helps you figure out what kind of plan you can afford, what your employees want, and what to do. Important tax and insurance issues are covered in detail and step-by-step guidance lets you design a compensation strategy that works for both you and your employees. Case studies, sample plans, and helpful references make this book your one-stop source for complete coverage of alternatives, from cash bonus programs to employee stock option plans (ESOPs) and everything in between. With Beyond 401(k)s for Small Business Owners you'll have all the tools you need to: Maximize owner benefits, reduce taxes, and enhance your retirement income Use creative compensation to motivate your employees Understand qualified and nonqualified plans Address the unique issues of family businesses Get the best deal on insurance and benefits for your company Avoid expensive pitfalls Measure your progress and keep your plan on track

Author Biography

JEAN D. SIFLEET, Esq, CPA, is an attorney and Principal of Smart Fast® Consulting, an advisor to small business owners.

Table of Contents

1. What Are You Trying to Accomplish?	1	(12)
Different Goals Need Different Plans	2	(1)
Compensation and Benefits Evolve as the Business Grows	2	(2)
"Be Careful What You Ask For"	4	(1)
For a Current Tax Deduction, You Need a "Qualified Plan"	4	(1)
To Limit Participitation in the Plan, You Need a "Nonqualified Plan"	5	(1)
Look at the Big Picture before Diving into the Specifics	6	(1)
The Bewildering Array of Alternatives	6	(7)
2. Why Have a Compensation Plan?	13	(12)
Compensation Reflects Your Company's Values	13	(1)
Base Pay and Benefits	14	(1)
What Do You Currently Offer?	15	(1)
How Does Your Pay Compare?	16	(1)
Use Compensation to Motivate Employees	16	(1)
What Behaviors Do You Want to Encourage? Discourage?	16	(1)
Writing Your Compensation Plan	17	(2)
A Written Plan Will Help You Be Consistent	19	(1)
Using a Calendar Time Line	19	(2)
Next, Create a Visual Calendar Framework for Your Planning Process	21	(1)
What Is Important to Employees?	21	(1)
Planning Is an Ongoing Process	22	(3)
3. What Is Important to Employees?	25	(10)
Employee Input Is Critical	25	(1)
Research Shows Some Reasons for Employee Dissatisfaction	26	(1)
Research Shows What Employees Typically Want	27	(1)
Improving Noncompensation Issues	27	(2)
Improving Compensation Issues	29	(1)
Has Your Company Done the Following?	29	(1)
Improving Benefits	30	(1)
How to Assess What Your Employees Really Want	31	(1)
Benefit Survey Dos and Don'ts	31	(3)
Conclusions	34	(1)
4. What Is the Current Employee Picture?	35	(4)
Getting an Integrated Picture of the Workforce	35	(1)
Informed Decision Making	36	(1)
Conclusion	37	(2)
5. Family Business?	39	(8)
Recurring Patterns of Family Dynamics	39	(1)
Succession Planning 1-2-3	40	(4)
Special Considerations in Evaluating Options for a Family Business	44	(3)
6. What Are the Options?	47	(40)
Part 1-Easy and Inexpensive Options	47	(8)
Part 2-More Complicated and Costly Plans	55	(13)
Part 3-Complex and Expensive Plans	68	(6)
Tax Consequences-Incentive Stock Options	74	(2)
Tax Consequences-Nonqualified Stock Options	76	(11)
7. What Do You Really Need to Know about Buying Life Insurance?	87	(20)
Why Buy Life Insurance?	87	(3)
Overview of the Life Insurance Buying Process	90	(7)
What to Do If You Are in Poor Health	97	(1)
Tax Issues	98	(1)
Tips for Getting the Best Terms	99	(3)
Best Buys in Life Insurance	102	(3)
Conclusion	105	(2)
8. Case Studies That Illustrate Alternatives	107	(26)
Phase 1. Start-Ups and the Early Years	108	(2)
Phase 2. Continuing to Grow	110	(2)
Phase 3. Becoming More Profitable	112	(6)
Phase 4. Success! And Your Retirement Approaches	118	(1)
Cross-Tested Profit-Sharing 401A(4)	119	(2)
Defined Benefit Plans	121	(5)
Contributions: Comparing Apples with Apples	126	(1)
Nonqualified Plans	126	(5)
Conclusion	131	(2)
9. Requesting Proposals	133	(4)
10. Implementing Your Plan	137	(10)
Phase 1. Introducing the Plan to Employees	137	(1)
Phase 2. Staying in Compliance with the Law	138	(7)
Conclusion	145	(2)
11. Tips from Experts to Avoid Common Mistakes in Retirement Plans	147	(20)
12. Financial Health-Check: Is Your Plan on Track to Achieve Your Goals?	167	(12)
Is Current Funding Adequate for Retirement Needs?	168	(1)
Funding the Shortfall	169	(7)
Get a Second Opinion	176	(1)
Schedule a Financial Health-Check	176	(3)
13. Avoiding Chaos: Estate Planning and Retirement Planning	179	(6)
Severe Consequences of Doing Nothing	180	(3)
Conclusion	183	(2)
14. Resources and References	185	(64)
Internal Revenue Service	186	(1)
Department of Labor (DOL) Employee Benefits and Security Administration (EBSA)	186	(63)
Appendix Common Definitions	249	(4)
Index	253