How S-Corp Earnings Affect Your Social Security Eligibility
If you run an S-corp and pay yourself a low salary to cut your payroll tax bill, there’s a good chance nobody has explained what that same move does to your future Social Security disability check. This article walks through exactly where the tradeoff lives, using a real numbers-based example, so you can make the […]
SPIA Taxes: IRA vs. Roth vs. After-Tax Funding Explained
Ask five people whether SPIA income is taxable, and you’ll get five confident, contradictory answers — because the real answer depends entirely on one detail most people never think to mention: where the money came from before it became a SPIA. A SPIA doesn’t have its own tax rule. It borrows one. The exact same […]
SPIA vs. SPDA: Untangling Two Very Different “Single Premium” Annuities
You typed “SPIA” into Google because that’s the term your agent used, or the term you saw in a rate sheet, or the term a friend mentioned over coffee. Then the page that loaded described something that didn’t match what you were told: a product that grows a balance instead of paying you income, with […]
Getting a Policy Out of a Qualified Plan: Swap-Out vs. Distribution
If a qualified plan is holding a life insurance policy on your life, that policy has a deadline the plan documents rarely spell out in plain language: it has to leave the plan before your distributions begin. Not necessarily surrendered — but resolved, one way or another, on a schedule the IRS sets rather than […]
Section 162 vs. Pretax For Purchasing Life Insurance: Which Funds Your Plan?
Article #57 — Section 162 vs. Pretax (Preview) The short answer: A business bonusing itself money to buy a policy (Section 162) and a business redirecting old retirement money to buy a policy (the pretax route) get lumped together in search, but they’re opposite mechanisms — new money taxed now versus old money still deferred. […]
Roll Over an Old 401(k) Into Life Insurance Without Paying Tax First
The short answer: Old 401(k) or traditional IRA money generally can’t buy life insurance directly, and cashing it out to buy a policy personally means paying ordinary income tax on the withdrawal first. But if you have genuine self-employment income — even a side business alongside a day job — you can roll that old […]
How Life Insurance Fits Inside a Cash Balance Plan
Cash balance plans have a name problem, and it’s worth clearing up before anything else. “Cash balance.” It sounds like there’s an account with your name on it, holding actual dollars, waiting for you. There isn’t. It’s a hypothetical bookkeeping entry — a number on paper backing a promise, not a pile of dollar bills […]
Is a 412(i) Plan a Scam? The 2004 IRS Crackdown, Explained
In 2004, my first year in this business, a guy in my office was dating a woman whose father built these plans for a living. Chris brought me in on it — walked me through how a policy’s cash value could sit artificially low for the first few years, then “spring” up to its real […]
How Business Owners Buy Life Insurance With Pretax Dollars
Every dollar your business earns gets touched by the tax man at least once — sometimes twice before it ever reaches something you can use. But there’s a way to make him wait years longer than he’d like on money you’re using to protect your family and your business — and on the death benefit […]
What Is BOLI? Bank-Owned Life Insurance Explained
If you’ve ever been told that permanent life insurance is a bad investment — overpriced, oversold, something you’d be smarter to skip in favor of a mutual fund — here’s a fact that doesn’t fit that story: the most risk-averse, heavily regulated institutions in the American economy hold billions of dollars of it themselves. I […]