For The Future | Success Story
Client Challenge
A 35-year old, self-employed professional had recently begun earning a very high level of income. Along with that high income came very high income taxes. The client lived relatively modestly and wanted to save substantially for retirement and minimize his tax liability.
RoseRock Actions:
- We thoroughly reviewed the client’s recent tax returns and his business’s financial statements. We discussed the client’s surplus cash flow and evaluated his business projections for the next 5-10 years.
- It was determined that the client would benefit from working with a CPA with a higher level of sophistication than the one he was using from his hometown. We recommended a local CPA firm that had worked with many of our clients in similar circumstances.
- We determined that the client would benefit from forming an entity for his business. We chose an LLC that would be taxed as an S-Corp, which would reduce his liability exposure and offer beneficial tax treatment.
- Working with the CPA and a Retirement Plan TPA & Actuary, we created a retirement plan for his business that combined a 401(k) with a Cash Balance Plan to allow for more than $150,000 of pre-tax retirement savings annually.
Summary
Our client is now able to substantially save for his retirement in a tax-advantaged way that he never knew was possible.
