Question #2

Does your client want to offer a retirement benefit or a death benefit?

Death benefit

Retirement benefit


Why is this relevant?

Some plan designs assume that the focus is employee death benefit while others focus on retirement income. To create the proper design, we need to know the intent of the plan. A death benefit plan can provide either a tax-free or a taxable benefit, depending on the plan design. A retirement benefit plan can provide either taxable or tax-free income. Some plan designs pay a fixed amount for a specific number of years and other plan designs are flexible about amount and duration.

 

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