Why Your Accountant Can’t Help You Retire if You Own Your Own Business

Posted on September 6, 2013 by Bill Faiferlick

You don’t know what you don’t know, and neither do they.

Often the people you trust the most with your money matters unknowingly make inaccurate assumptions based on their level of knowledge, and in the process keep you from knowing about beneficial opportunities.

Bill Faiferlick Retirement Planning for Business OwnersMost financial advisors and accountants don’t know how to interpret specific tax code sections that apply to business owners and retirement planning. This extends to the intended application of legislation and how the IRS and the Department of Labor enforce those specific tax code sections.

Since 1913, the tax code has grown from 400 pages to 70,000 pages. Since 2000, the tax code has been amended 29 times, generating more than 2,000 significant changes.

It stands to reason that unless you routinely work in the business owner retirement planning area it would be very hard to stay current. Given the limitation of available time and the voluminous tax code changes and code sections, few advisors and accountants can stay up to date on changes in this specialized area.

Unfortunately, some advisors often display biases believing that what they’re familiar with is all there is. Their perspective may very well be correct as far as their general knowledge and expertise is concerned, but as the old saying goes: “you don’t know what you don’t know.”

Most financial advisors and accountants have limited knowledge of the opportunities or plans that were defined by the Pension Protection Act of 2006 and are regulated by the IRS and the Department of Labor.

This doesn’t diminish their value to your company in other areas, of course. Failing to appreciate the inherent limitations within every profession works against you, ensuring you’ll work harder and longer than necessary.

History and Background of Hybrid Pension Plans

Qualified owner and professional pension plans (also referred to as hybrid pension plans) have existed in American business for about fifty years. Over time, their usage and accessibility has varied. Understanding their history and their embedded origin in ERISA is important if you want to appreciate the magnitude of the benefits these options present today.

In a nutshell, variations of owner and professional, qualified and non-qualified, plans were widely used and popular. In the mid 70′s Congress tied business owners’ and professionals’ hands regarding personal retirement planning. It took Congress years to wake up to the consequences of their decision. Congressional changes in 2000 again opened up an amazing opportunity for business owners and professionals. Congress realized the importance of balancing the owner’s and professional’s needs against the employees needs. Both have to be addressed and are, at times, interrelated.

Bill Faiferlick Retirement Planning for Business Owners

To learn more about hybrid pension plans and how one might help you, do any or all of these:

email me to set up a free call to talk about it
• buy my book, Retirement Planning for Business Owners
• sign up for my blog updates