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Michael A. Milazzo, CLU, ChFC
Registered Principal
The Meridian Financial Company
3350 Club Villas Dr SE, Unit #1303
Southport, NC 28461
Phone: 631-979-4223
Fax: 910-854-0002
Email: meridian@ae.cadaretgrant.com
Website: www.merfinco.com
November/December 2017
A smart use for business dollars
As a business owner, you’ve worked hard to get to this point in your life. The time and effort you’ve invested in your business are paying off. But can you be sure that your business can continue to provide for you financially for the long term? If you haven’t already done so, you might consider putting in place certain strategies that use business dollars to fund insurance and retirement benefits.
Fund a retirement plan
One way you can use money from your business to provide personal benefits is to create and fund a retirement plan. If you consistently contribute the maximum amount to your retirement plan, you could potentially accumulate a significant amount over time.
Two possible options are the 401(k) plan and the SIMPLE (Savings Incentive Match Plan for Employees) individual retirement account. A Simplified Employee Pension (SEP) plan is another option. Your financial professional will be able to walk you through the various features and benefits of each option.
Plan your exit strategy
Selling your business is another obvious — and generally the most lucrative — opportunity to transfer capital. If you plan to sell your business outright, there are tax and succession issues that you will need to manage. For example, if you sell your business for a large profit, you may face a significant tax bill. However, by selling your business in installments, you may be able to spread the tax burden out over time. The risk, of course, is that if the business falters or fails after the new owners take over, you could end up with merely a fraction of the total you had expected.
A succession plan can help provide a structure for the future transfer of your business. Just make sure to include a funding mechanism in your succession plan, especially if a family member is expected to assume ownership upon your death. Life insurance is often used as a funding mechanism for such an eventuality. Your financial professional can provide details on how this approach works.
FINRA Reference FR2017-0620-0127/E SMBUS
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Securities and Advisory Services offered through Cadaret, Grant & Co, Inc, a Registered Investment Advisor and Member FINRA/SIPC. The Meridian Financial Company and Cadaret, Grant & Co., Inc. are separate entities. I am registered to sell Securities in the following States: NY, NJ, PA, NC, FL, ID.
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