Business Owners
A financial security planning strategy that incorporates the following services and plans can help ensure that money will be available to support and protect your business interests.
Business Owners Checklist:
Business Financial Security Plan
It is important to plan for the unplanned. Illness or health concerns can disrupt your business and leave you scrambling to keep your livelihood afloat.
The program offered through Godfrey Wealth Management Inc. provides protection designed to keep your business healthy while you are recovering.
Things to consider
- Are you aware I can set you up with tax-free income replacement protection if you ever suffer a health problem that prevents you from working?
- If illness or injury made it impossible for you to work, what would happen to your business?
- Who would pay your overhead such as rent or mortgage, utilities, staff wages?
Group Benefits
Quality retirement savings programs are essential in the retention of valued employees. Godfrey Wealth Management Inc. has experience implementing and monitoring the following employer sponsored retirement programs:
Things to consider
- Are you aware of the cost effectiveness of providing a group benefit program for your employees?
- When was the last time your group broker had a full benefit communication session with your staff?
- Have your group health and dental insurance plans been redesigned to reflect recent changes in Canada’s health care industry?
Pension and RPP
Calculate what you can expect from the government plan:
RPP (Registered Group Pension Plan)
RPP is an arrangement set up by an employer with the purpose of providing retiring income to employees. A group pension plan is based on the following:
- Eligibility period: immediate or length of time plus, voluntary or mandatory participation
- Normal retirement age: 60 or 65
- Early retirement: up to 10 years prior to normal retirement age
- Late retirement: up to age 69
- Vesting: provincial or 100% immediate absolute locked-in
- Death: member and employer contributions plus interest automatically paid to named beneficiary
- Normal form of retirement: single life guarantee 10 years
There are two specific types of company pension plans in which you, the business owner, can select:
1. Defined benefit:
- Future benefits predetermined
- Employer contributions only (non-contributory)
- Employer and employee contributions (contributory)
2. Defined contribution (known as money purchase):
- No future benefits determined
- Benefits will depend upon amounts contributed and investment performance;
- Contributory or non-contributory
Things to consider
- How many people can maintain their current standard of living after a 55% to 72% reduction in income?
- Does your business currently have retirement bonuses? Parting gift (gold, watch, cash, etc.)? Continued pay?
- Is your business able to set aside funds to invest in your employee’s retirement?
Group RRSP (Group Registered Retirement Savings Plan)
A long-term method of saving to supplement funds provided by the pension plan at retirement. The employees own the fund and should they terminate employment, their contributions, as well as any employer contributions, are theirs to do with as they wish.
At retirement, the employee can purchase an annuity, a RRIF or receive cash.
DPSP (Deferred Profit Sharing Plan)
DPSP is a plan established by employers to share company profits with all employees or only key employees. The employees’ share of company profits is set aside in a fund and a separate account is maintained for each designated employee until they become eligible to receive their share.
This usually occurs when they die, retire, or terminate employment. A DPSP may supplement or take the place of a group pension plan.
Business Insurance
Business owners purchase insurance to protect their businesses, key partners, themselves and their families from an untimely death or disability. There are numerous areas in which insurance can play a key role in business financial security planning.
Some of which include:
- Providing immediate tax-free capital to cover potential capital gains owing on transfer of shares to the next generation.
- Funding a buy/sell agreement between business partners in case of untimely death.
- Providing the proper funding to a key employee or business partner in case of death or disability.
Things to consider
- Do you have a plan in case of injury, illness or untimely death amongst your key employees/personnel?
- Do you know what your business is worth?
- How will you stay profitable and stable if you have unexpected personnel changes?
Succession Planning
A proper business succession plan can help protect you and your heirs against losses from unexpected illness, death, and taxation.
Without a proper succession plan in place, business owners risk the chance that someone else could decide what happens to their business.
Godfrey Wealth Management Inc. will work alongside you and your other trusted advisors to create a customized succession plan that will meet your needs and goals.
Things to consider
- What is your exit strategy from your business?
- Who will control your business when you retire or die? Spouse? Partner?
- If your business had to be sold after your death or disability, could it be sold for a profit?
Investments
Like individuals, businesses have many investment options.
As the options will relate directly to your type and size of business, please make an appointment with Godfrey Wealth Management Inc. to discuss your specific business' investment opportunities.
