What would happen to your business if you, your partner, or a key employee became seriously ill? Are you able to attract and retain quality employees who keep you profitable?
Whether you’re a corporation, small business with employees, or a solo entrepreneur, a number of financial considerations can keep you profitable, even during times of adversity. Consider the impact on your business if you or a key employee were to become seriously injured or ill. Do you have financial safeguards in place that will allow you to hire temporary workers and keep your business operating? What benefits are you offering to attract and retain a quality workforce? Do you provide life insurance or have an IRA or 401K retirement plan for employees? With a few affordable strategies, you can safeguard your company from adversities that can put you out of business. With little or no cost to you, you can retain good employees by helping them to secure their financial future.
Small Business Financial Services in SW Florida to Help Your Business Grow
Insurance for a key person in a business can apply to the owner or a key employee whose death might cause substantial harm to a business. The company buys life insurance for key people, pays the premium, and is the beneficiary of the policy.
Life insurance can be an important employee benefit for attracting and retaining a quality workforce. Often the policies can be purchased in an amount equal to or double the employee’s annual salary.
Larger corporations generally offer life insurance policies to executives in a company. In this case the company pays the premium which is deductible as a tax-exempt contribution. The executive is the beneficiary of the policy.
Life insurance policies can include provisions for living benefits that pay partial benefits to the insured in the event of serious long-term illness. Eligibility requires that they are terminally ill with less than 12 months to live.
A type of traditional IRA, SIMPLE IRA is for small businesses and self-employed people where there are less than 100 employees. A SIMPLE IRA requires employers to match employee contributions up to 3% of their salary or a flat 2% of compensation for each employee with at least $5,000 in compensation for the year, regardless of whether the employee contributes or not.
SEP is a tax-deferred IRA set up by the employer for all employees and the business owner. In a SEP IRA, the employer makes tax-deductible contributions for everyone covered. Contributions by employees are not permitted.
The main advantage of a 401k is that employers can match or otherwise contribute to an employee’s 401k account. The limit, including employer contributions, is about 10 times higher than the maximum contribution in an IRA. Unlike an IRA where investment options are almost endless, most 401k plans offer limited investment options, with the average 401k plan offering only 20 funds, according to Brightscope.
Workers Compensation is a policy purchased by employers for their employees who are unable to work because of a job-related injury. The policy compensates for economic loss, reimbursement or payment of medical and life expenses, and benefits payable to the dependents of workers killed during employment. The requirements related to Workers Compensation vary by state.
Tri-Stand Financial provides small business financial services for corporations, small businesses with employees, and solo entrepreneurs. Additional services for tax planning, asset protection, trusts and other legal services are offered through a team of expert financial and legal professionals. This provides you with access to top-rated comprehensive business services for financial security and prosperity that you can trust.