Settling on a Salary
It’s somewhat disheartening that 40% of working Americans believe they will never save enough money to retire.1There may be nothing you love more than running your business today. However, you may not be willing and able to stay involved forever, and there could come a time when your interests or passions lead you elsewhere. When your company’s bottom line improves, it may be tempting to give yourself a raise and use the extra money to enhance your current lifestyle. But if you want to be in a position to finance your retirement dreams, you may want to think about how you can use some of your business proceeds to benefit your financial future. Good Time to GrowOwners may work the longest hours, but for better or worse their paychecks come from whatever is left after other business expenses are paid. One rule of thumb is that no more than 50% of the profits should be taken as salary, but more may be required to meet personal needs during lean times.  As revenues grow, consider whether it might be beneficial to forego a certain amount of salary and reinvest back in the business. Modernizing equipment or facilities, hiring new employees, or ramping up marketing efforts could help boost your company’s productivity, market share, and future profits. Budgeting for BenefitsDepending on how your business is organized, you may be able to take advantage of personal tax benefits by deferring some salary and contributing to a qualified retirement plan. It may also be worthwhile to devote some resources to funding other types of workplace benefits such as life, health, and disability insurance for both you and your employees. Of course, you own a business so you will have the income you need to live well today. But it might be possible to choose a salary and benefits that could also help you to lighten your tax burden, grow your business, and save for a comfortable retirement. 1) CNNMoney, April 13, 2011 The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc. |
| Principal Financial Group |
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Larry Witzel is licensed in AK, AZ, CO, DE, FL, IA, IL, IN, LA, MA, MI, MN, MO, NC, OH, TN, TX, UT, WA, and WI to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), and is securities registered in AK, AZ, CA, CO, FL, IA, IL, IN, KS, KY, MA, MI, MN, MO, NC, NE, NJ, NM, NV, OH, PA, TN, TX, UT, WA, and WI and adviser registered in IA. Bert McClintock is licensed in DE, IA, MO, NC, and TX to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), and is securities registered in IA, IL, MO, and NC and adviser registered in IA. Gabe Rohwedder is licensed in IA to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), and is securities registered in IA, IL, MO, and NY and adviser registered in IA.
This site is not a solicitation of interest in any of these products in any other state.
IMPORTANT CONSUMER INFORMATION: Larry Witzel, Bert McClintock, and Gabe Rohwedder may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Larry, Bert or Gabe that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment adviser, BD agent or IA representative or any financial institution he represents, contact your state securities law administrator.
Insurance products from the Principal Financial Group® are issued by Principal National Life Insurance Company (except in New York), Principal Life Insurance Company and the companies available through the Preferred Product Network, Inc. Securities and advisory products offered through Princor Financial Services Corporation, 800/247-1737, member SIPC. Principal National, Principal Life, the Preferred Product Network and Princor® are members of the Principal Financial Group®, Des Moines, IA 50392. Larry Witzel, Bert McClintock, and Gabe Rohwedder, Principal National and Principal Life Financial Representatives, Princor Registered Representatives, and Financial Advisors. Strategic Financial Solutions is not an affiliate of any company of the Principal Financial Group®.