Tax-Saving Retirement Guide for Insurance Professionals

Tax-Saving Retirement Guide for Insurance Professionals

Insurance companies employ a number of agents who operate the business across the country to reach as many clients as possible. Agents also allow insurance companies to cater to the specific needs of their clients on a more personal level.

Insurance agents, spend long days by helping their clients and help them to protect their possessions from any unexpected circumstances. What about their possessions and future? What will they save as their retirement program?

An independent agent or small entrepreneur, don’t have lots of income or the luxury to build up a high revenue benefit packages. So it is important that an insuruer or professional, you should save more to enjoy a relaxing retirement life.

There are four different types of retirement plans for the independent insurance agents and these plans are made to reduce their taxable income as saving more for the retirements.

Solo 401

If you are a solo agent or you don’t have any business set up with employees without your spouse, this is the right plan for you. It comes with a great limit of contribution and you need to pay the taxes at the time of withdrawals with the plan.  If you have an account with nearly $250k or more than that, you need to provide an annual report including IRS. This plan is quite easy to have.

SEP IRA or the simplified employee pension plan

This is another plan that quite easy to set up and a good choice for the self-employed insurance agents. This is also a good choice if your requirement is to get the match contributions as you are looking for profits. YIT can allow you to contribute nearly $53,000 per year. Remember that, if you work as a team with employees, you are not allowed to contribute to your account a higher level of percentage, more than your employees.

SIMPLE IRA or the saving incentive match plan

This plan can be appropriate for the small entrepreneurs or agent with a number of employees.  There can be the necessity of matching contributions as your employees will not contribute and matching contributions are deductible here. It comes with moderate limits of contributions and you need to be little careful with the maintenance and setups.

Defines Benefit Plan

This is best for the high revenue self-employed service providers with a stable income and who comes with the desire to keep lots of money for the retirements. The contribution will depend on your age and it can higher like $100k/per year and all the contributions be tax-free till the date of withdrawal. One of the biggest drawbacks of the system is you need to go for a commitment of a higher level of funding as you are setting up the plan. You need to contribute on the behalf of your employees also if you have more employees.

Investing for retirement is a vital step to ensuring financial stability when you retire. In addition, it can provide some financial relief to any family you may leave behind. People are interested in different forms of retirement planning.