The Benetrends Rainmaker Plan

Updated : Sep 12, 2019 in Articles

The Benetrends Rainmaker Plan


The
process begins with the establishment of a
new corporation. As part of our services, BeneTrends takes care of the set-up of this
new C-corporation using the proper legal structure that supports the establishment and operation
of the company’s qualified retirement plan. Next, BeneTrends designs a retirement plan
for the new company. BeneTrends will design this plan using specific features that are
right for you and your business. These features will be determined during an
up-front needs assessment session with an expert Retirement Plan Specialist from BeneTrends. The new company then adopts the qualified
retirement plan The company’s new retirement plan is designed
to allow rollovers from most other types of retirement plans. This allows you — and your company’s employees
— the option to rollover current retirement funds into the new retirement plan… tax-deferred
and penalty-free You and the other plan participants that have
rollover money then direct how these funds are to be invested for your own individual
accounts. The Rainmaker Plan design allows rollover
contributions (and only rollover contributions) to be invested in the stock of the new company
that sponsors the retirement plan. If you or other plan participants direct the
investment of your rollover contribution in company stock, the plan then purchases stock
in the new company. The company stock purchased by the plan is
credited to the individual accounts of the plan participants per their investment decision.
Remember, only rollover money can be invested in company stock. For example, suppose you have $250,000 in
an existing retirement plan and you require $150,000 to purchase a new business. Using
the Rainmaker process, you can roll the entire $250,000 into your new company’s retirement
plan. You would then direct $150,000 of the rollover to be invested in company stock.
The remaining $100,000 in the plan can be invested in other stocks, bonds, or mutual
funds, depending on the investment options adopted by your plan. Your new company ends up with $150,000 in
cash that it can use for any legitimate business purpose, including payroll, rent, marketing,
supplies, salaries, furniture and fixtures, and more. The plan ends up with company stock valued
at $150,000 which is credited to the accounts of the individual who directed an investment
in company stock from their rollover monies You and your employees will utilize the new
plan to build personal wealth, plan for your retirement, and build wealth for the company. The retirement planning experts at BeneTrends
will help you determine how to get the maximum benefit from your plan and the best way to
achieve your long-term goals. Just like other qualified plans, rollovers,
wage deferrals or contributions can be invested in other investment options such as stocks,
bonds and mutual funds giving plan participants the ability to diversify their portfolios. Although BeneTrends does not provide investment
advice, you may use your own financial advisor to determine what other types of investments
to offer through your company’s new plan, or you can enlist the services of one of BeneTrends’
nationally-recognized partner firms. If at some point you find you need additional
funding for the company, you have the option to re-direct some or all of the $100,000 from
the original rollover into additional company stock. BeneTrends will be doing more than you know
to help you protect your assets and maximize your benefits. As you consider funding your business, the
team at BeneTrends will help you evaluate options other than the simple rollover process
provided by many firms in this industry. Depending upon your individual situation,
it may be best for you to use a combination of business loans and retirement plan funds
to start your business. These types of decisions have bearing on how
quickly your business will arrive at break-even or profitability, or how great your debt expense
will be. It’s our goal to help you use your retirement
plan to succeed in business –both now, and in the future. For instance, you might rollover all of your
current retirement plan funds into the new retirement plan, but only use a portion of
them to invest in the new company’s stock The benefit of doing so is to provide your
business a cushion for later, in the event that you need additional working capital.
Down the road, if your company needs a capital infusion, it may not be easy to get a business
loan at that time. If you carefully direct your funds at the
time of the rollover, you can purchase additional stock later for just that type of capital
infusion. BeneTrends is an expert in this area.

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