There are many local, small businesses here in the tri-town. These businesses help bring a charm and character to our communities that help us remain a fantastic place to live. When you shop local and support these businesses, the money you spend directly supports your neighbors and friends. When a small business thrives, it is then able to give back to it’s community. It is a win-win for everybody. For this reason, I would like to dedicate this week’s column to the tri-town business owners. We appreciate you and want to see you succeed!


One of the reasons I started my own business is to have control of my financial future and flexibility. There are risks, of course, to doing this: ups and downs of market cycles and revenue, fixed expenses, time management, emergencies, being able to take advantage of opportunities when they arise and finally the exit strategy of accumulating enough money to live the lifestyle you desire in retirement. As a business owner, there are also a lot of restrictions and costs when it comes to accumulating money. You either have to lock up money for an extended period of time, pay extra costs and taxes to be able to save some money, or pay the cost of not earning anything on your money and keeping it vulnerable to taxes, lawsuits, government restrictions and bank rules. It’s as if your money is in jail doing a 30 year sentence!


Most business owners I meet know of two places to put their hard earned money: a bank account which keeps the money available but earning very little, or a qualified retirement plan like an IRA or a 401k where it is not available without taxes and penalties. Business owners need funds available when something is going really well to grow and expand and also need money when things are not going so well. In a nutshell the dilemma is this: The need for liquidity makes it risky to invest money for the long term, however, the risk of not putting away money for the long term creates a stress that they may never be able to exit the business and/or all of their money remains locked up.


So what is a business owner to do? There are 2 solutions in this case: a non-qualified investment account, and/or an executive bonus plan. Both plans allow you to put money in and take money out when needed1 and there is almost no limit to how much you may deposit or withdraw. The money has potential for more growth than a traditional bank account, with the added benefits of providing potential protection from creditors2, and minimizing taxes, all while having potentially less oversight and restrictions from the government and banks.  This gives you the control and flexibility you wanted when you started the business in the first place.

Change Your View, Change Your World


1 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

2 State creditor protection for life insurance policies varies by state. Contact your state’s insurance department or consult your legal advisor regarding your individual situation.


Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.


Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 800 Westchester Avenue 4th Floor Suite N409, Rye Brook, NY 10573, 914-288-8800. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. TrueView Financial LLC is not an affiliate or subsidiary of PAS or Guardian.


2018-66580 Exp. 9/20