Building Contractor

Building Contractor

Younify Consulting Financial Strategies for Small Businesses, Law, Accounting-contractor-homebuilder-colorado-springs

Project Description

Client

A building contractor with 14 employees – age 51. Gross receipts of $6mm and currently has 401(k) and Simple IRA in place. Wants to retire at age 60 and sell business to his
son. He only had $350k in retirement income saved thus far.

Business Challenge

The retirement funds offered to the employees were negatively affected by the market downturn in 2008 resulting in a 40% reduction in funds across the board. In addition, the builder and his wife had to drastically increase their retirement fund within the next 9 years.

Goals

Goal for the contracting firm was to modernize the 401k plans offered to the employees to include a pension like option that was not susceptible to market downturns. The contractor also had aspirations to expand his business over the next two years including access to a fund that could be utilized for marketing, real estate purchases and equipment.

Action and Results

A business efficiency plan was implemented, creating a revitalized employee retirement program where each employee would have guaranteed income for life and saved the builder 35% in annual fees. In addition, $300,000 was recaptured in year one, allowing the contractor to fund the expansion. The contractor was also able to contribute up to $400,000 per year in recaptured dollars toward his retirement account. Currently, he is set to retire at age 60 with approx. $8.5mm in his account to be utilized tax free.