The actual funding calculation can be a little challenging. Benefits received are based on the total years of service coupled with the salary for the past few years leading to retirement. An annual credit based on the salary is made to your account, normally 5% and then an interest rate cred...
The IRS allows a maximum contribution that a business owner can deduct of up to 150% of the current accrued liability. This limit is calculated at the actuarial valuation date and includes interest through the plan year-end which normally coincides with the company’s year-end. These plans hav...
This means that whether you’ve used up your total deductible in the past year or not, at the start of next year, the amount will restart to what is stated in the plan. To better comprehend what a deductible is and how it works, let’s take a look at an example. Let’s say your...
The limits set by the IRS primarily revolve around the concept of the policy’s cash value and its relationship to the total death benefit. Cash value represents the accumulated investment portion of a life insurance policy, while the death benefit is the amount paid out to beneficiaries upon t...