Something more for the ownership groupBlog added by Brett Anderson on October 26, 2011
Brett Anderson

Brett Anderson

Hudson, WI

Joined: July 21, 2011

My Company

St. Croix Advisors

As a business owner you’ve put your time, your money, your good name and your future on the line. It hasn’t always been easy and when times are good, it’s time to take care of yourself and your family’s future.

Even with a traditional retirement plan clicking away at your business, there is more you can do for yourself and family to help set up and guard for a secure future when you decide it’s time to retire. Here’s how.

The following model demonstrates how a supplemental executive retirement plan (SERP) can work for company owners and executives. In this model, the company agrees to pay an additional amount to an executive upon their retirement, death or disability.

The benefit is negotiated and agreed upon on a case-by-case basis. In this model, the company purchases a life insurance policy that builds cash value for the executive to informally finance the plan. Those funds are earmarked to be available to provide the benefit at the retirement, death or disability of the executive. Because these types of policies accumulate cash value, it shows as an asset on your corporate balance sheet.



Once the executive retires, dies or becomes disabled, the cash value or death benefit is paid out, as illustrated below.



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