Attracting & Retaining Key Employees: Annuities

Creating and maintaining a vibrant and successful business is important to all business owners. Like many small business owners, your success may be dependent upon your key employees and the ability to attract additional talent. Offering these key individuals specialized retirement arrangements funded by deferred annuities may help.

What is a Key Person Annuity?

An annuity is a contract between an insurance company and a key employee annuity owner. In exchange for a purchase payment, or series of payments, the insurance company guarantees to pay a stream of income in the future.

How is it used?

Deferred annuities are long-term investments that can be used to help fund individual retirement arrangements for key employees. They are designed to pay a guaranteed stream of income at a later date.

What are the benefits?

 The benefits of deferred annuities include payment of guaranteed lifetime income for the key person, potential to accumulate savings on a tax-deferred basis and a death benefit.

Savings Incentive Match Plan (SIMPLE-IRA)
A written salary reduction arrangement that allows eligible employees to contribute to an Individual Retirement Account (IRA) in their name. Employers are required to make annual contributions for each eligible participant.

Fixed Annuities:   A Savings Incentive Match Plan (SIMPLE-IRA) Being a small business owner has its advantages, and access to SIMPLE IRAs is one of them. It is a written salary reduction arrangement that allows your key employees to contribute to their individual IRAs. As the employer, you are required to make annual contributions to the key employee's IRAs. This type of arrangement is available to self-employed individuals or owners of companies that have 100 or fewer employees and no qualified retirement plan. Key Employees are eligible for a SIMPLE IRA if they have earned at least $5,000 annually.

Simplified Employee Pension Plan (SEP-IRA)
A written arrangement that allows an employer to make contributions to IRAs for all eligible key employees.

Fixed Annuities:    A Simplified Employee Pension Plan (SEP-IRA) As a small business owner, you may need an easy and economical way to contribute toward your key employees’ retirement plans. A SEP-IRA arrangement may be worth considering. This type of arrangement is for businesses of any size, including self-employed individuals. In order to be eligible, key employees must be age 21 or older and employed by your company for three of the last five years. IRAs are established by each key individual and funded entirely by your company. Employer contributions are discretionary and you determine the amount or percentage each year.

If you prefer to speak to someone about attracting and retaining key employees for your business call 866-866-2960