Create Your Own 401(k)

Whether you have zero employees or a hundred, establishing a 401(k) allows you to manage taxes, shield assets from lawsuits, and secure your own retirement. And for those with employees, a retirement plan can increase revenue and employee engagement. The costs to establish a plan can be surprisingly small.

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Why a Purposeful SP 401K Plan is

Designed Better


Table of Contents

  1. Benefits to Business Owners

    • Lower Taxes

    • Shield assets from lawsuits

    • Increase company revenue

    • and more

  2. Lower fees than the big providers

    • Why Big Providers Often Cost More

    • Why Lower Fees Matter

  3. Your advisor’s background

Our plans are built on conflict-free advice, the protection of Charles Schwab or TD Ameritrade as custodian, expert regulatory and tax compliance, and the opportunity to delegate owner’s fiduciary responsibilities.

Don’t Pay an Advisory Fee and Get a Sales Rep

With many national 401(k) providers you get an advisor who represents the broker-dealer or insurance company rather than your company. We don’t have these conflicts of interest because we are independent of the custodian and record keeper. Our legal obligation is to our clients.

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Custodian Option

Custodian Option

Custodian Option

Custodian Option


A FIDUCIARY & FEE-ONLY ADVISOR

As a Registered Investment Advisor, I am required by law to place my clients' interests above my own. And I don’t accept commissions or other kickbacks from the investments in your plan.

You may also delegate much of your fiduciary obligations to us, reducing the liability exposure to your company.


AN EXPERT ADMINISTRATOR AND RECORD KEEPER

Your plan administration, tax filings, & regulatory compliance are provided by our partner, Professional Capital Services.

Founded in 2001 by tax and ERISA attorneys who saw the need for a conflict-free, full fee disclosure, no hidden agenda retirement solution; PCS is a leader in retirement plan administration and record keeping.


A PROVEN AND STRONG CUSTODIAN

Your plan’s assets are held either at Charles Schwab or TD Ameritrade. Neither Purposeful SP nor PCS have access to plan moneys.

Using a third-party custodian means there are additional checks and balances to ensure plan money is secure, further protecting your plan and reducing company liability.

The right retirement plan can lower income taxes, shield assets from liability, enable owners to pass the business to children tax-free, and More

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RETIREMENT PLANS HAVE SURPRISING

Benefits for Business Owners

A retirement plan, if properly constructed, can provide owners with an amazing array of benefits beyond just retirement. If you think a 401(k) is just about investing for retirement, you’re missing a lot.

While investing for retirement is the primary purpose of a 401(k) or other retirement plan, your plan can also:

  • Manage and Lower Income Taxes

  • Shield Assets from Potential Lawsuits

  • Increase Company Revenue & Employee Engagement

  • Avoid Estate Taxes when Passing the Company To Children

  • And much more . . . .


Manage and lower income taxes for owners

One of the primary benefits of a 401(k) plan is the ability to lower your income taxes by saving for your retirement. Depending on the specifics of your company, a retirement plan can be structured to allow well over $100,000 of annual income to be shielded from taxes for a married couple.

And for companies with employees, even greater tax benefits are available when incorporating a retirement plan into a total compensation package.


Shield Assets from Potential Lawsuits

ERISA-qualified retirement plans have the strongest liability and creditor protection available under law, taking a portion of your personal wealth and effectively locking it out of the reach of a potential future lawsuit. This federal asset protection can be one of your most important benefits of establishing a retirement plan because, as a business owner, you are subject to an increase risk of lawsuits.


Increase Company Revenue & Employee Engagement

A well-supported retirement plan can actually increase revenue for your company. Companies on average experience a 3% growth in revenues when employee engagement increases by 5% according to an AON Hewitt study titled 2015 Trends in Global Employee Engagement. And employees with a retirement plan are 5x more likely to be engaged according to Towers Watson.

To further increase employee engagement, we provide free financial education and annual advising to employees as part of our retirement plans. These and other financial wellness programs have been proven to engage employees, increase retention, and provide other financial benefits to companies.


Secure Your Retirement

As a business owner, retirement doesn’t mean quitting your job, it means leaving your baby. A properly structured retirement plan can lay the path to allowing you to retire without being forced to sell or fully leave the business.

If you have a goal of retiring early, we can help create a retirement plan combined with other financial plans to let you retire when you want to; regardless of whether you company happens to be growing or in a temporary slump.


Avoid Estate Taxes when Passing the Company To Children

If passing your company to your children is an important part of your legacy, don’t let the Federal Government walk off with a major portion of your business. A plan can be created to keep you in control of the business while simultaneously transferring ownership to children with no estate or gift tax consequences.


retirement plans can also accomplish a other goals including:

Fund Business Growth: Many financial advisers push the advantage of diversifying investments out of your business, not realizing the best investment you can make might be investing back into your own business. While we generally don’t recommend having your business stock as a 401(k) option, your retirement plan can be structured to allow you to borrow from yourself to invest in business growth opportunities.

Sell The Business to Employees: If your company has employees, you can establish a retirement plan that allows you to cash out a portion of your business ownership while simultaneously funding employee retirement. And if done correctly, your company can take a tax deduction for establishing an Employee Stock Ownership Plan.

Create Incentives to Increase Company Profitability: Even if you don’t want to give up ownership in the company, retirement plans can be created to encourage employees to act like owners either through contributions based on profitability or through sharing in the increasing value of your business.

Most 401(k) providers offer advisers who are sales Reps paid through commissions, sales loads, and other kickbacks

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Transparent and Honest

Lower Fees

Purposeful SP 401(k) plans are built on full and transparent fee disclosure without the conflicts of interest that come from accepting commissions or other kickbacks. Our plans fees are designed to start as a low percentage of the plan assets and to get smaller as the plan grows.

To eliminate any incentive to choose investments or providers that could increase your fees, we don’t accept compensation from the investments, the custodian, nor the administrator of the plan. To further eliminate conflicts of interest, any sales loads, 12b-1 fees, or other investment compensation received by PCS is immediately credited to your account to lower the cost of the plan.


Why big provider Fees are Likely Higher

Retirement plans have often been a cash cow for the national companies that provide them. And the ‘advisers’ at big brokerage companies and insurance companies are legally sales representatives charged with maximizing profit for their employers. Only Registered Investment Advisers are required by law to act in the best interest of their clients.

Conflicts of interest abound when the adviser on the plan is an employee of the same company that custodies the assets, provides the investment options, and acts as the record keeper and administrator of your plan.

While all-in-one shopping might seem convenient, the lack of checks and balances allows for profits to be buried throughout the retirement plan in the form of investment expense ratios, sales loads, 12b-1 fees, commissions and other hidden compensation.

Not only do advisers on plans often charge fees well in excess of what a financial adviser typically charges, the adviser’s recommended investments often includes their own company’s mutual funds, annuities, and ETFs. And advisers often earn bonuses for increasing the profitability of your plan for their company.


Why Lower Fees are Important

Aside from the obvious benefit of saving your company money, lower fees also increase the retirement benefit to you and your employees and reduce the likelihood your company will be sued over the plan.

If your plan fees cost more by just 1% of the plan assets, the higher fee can have a dramatic impact on retirement balances when you retire. As an example: assume you contribute $500 per month to your 401(k) and the plan earns a 9% average return over 35 years. With a fee of 1% of assets, you would have $1.15 million in your account at retirement. But if the plan charges a 2% fee, your account balance drops by a quarter million dollars.

This significant impact is one of the many reasons 401(k) lawsuits are on the rise. And sadly, many of the biggest 401(k) providers in the country are being sued by their own employees because of the high fees they charge in their retirement plans. Even as your adviser is telling you how great the provider’s 401(k) plan is, they may be suing the provider for the high fees the company has in the plans.


Additional RESOURCES & ARTICLES

Joshua D. Escalante Troesh, MBA

Adviser Profile

  • Fiduciary & Fee-Only Financial Planner

  • Tenured Professor of Business

  • Ranked #1 adviser nationally - Investopedia’s Advisor Insights*

  • Quoted in Forbes, U.S. News & World Report, and many more

  • Passed the rigorous Certified Financial Planner (CFP) exam

Schedule a no-cost, no obligation consultation with Josh

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