Professionals and Entrepreneurs face a mystifying assortment of retirement plans for themselves that include Defined Benefit Pensions, 401k plans, SEP’s, 412i’s, Simple IRA’s, Keogh Plans, Profit Sharing Plans, NQDC’s, SERP’s, and the list goes on. Most of these plans involve plenty of complexity but little in the way of clear advantages over one another.

Enter the “Entrepreneur/Professional Annuity”. Specially designed for the business owner, this option is potentially superior for all entrepreneurs, including doctors, lawyers, other professional groups, franchisees, etc. There are many advantages:

• Tax advantages include tax free accumulation, exclusion ratio taxation and tax deductibility
• Ability to pick and choose who participates including just the top guy (or gal of course)
• Flexible contributions including one time only, unlimited size, and skipped deposits
• No ongoing administration, fees, liabilities, or long term financial commitments
• Security, guarantees and “income for life” from the largest, best known carriers
• Enhanced benefits with refunds of unpaid deposits, cost of living adjustments, etc.
• Superior probate treatment and substantial protection from creditors

Using qualified plans for the advantage of the business owner is a stretch in most small companies for several reasons. A big one is that monies are spent including other employees so as to meet non-discrimination and participation tests. Most entrepreneurs want control and flexibility over to whom, and how much, they provide their key employees.

Many small businesses also lack the kind of steady cash flow that other plans anticipate. Perpetual annual deposits are a lot to ask of most small companies. Entrepreneur Annuities are flexible, requiring no ongoing deposits, testing or fees. No actuaries, reporting, liabilities, TPA’s, etc. - not to mention fiduciary and legal responsibilities. They are also easily tied to company and participant performance.

Using their company to take advantage of opportunities is very useful to most self-made businesspeople and the Entrepreneur’s Annuity is available only when a company relationship exists. They are not available on a retail basis.

But the biggest reason is just starting to sink in on everybody: rising tax brackets are all but inevitable for the successful entrepreneur.