Exit Insight: sale proceeds from your business

The following is an excerpt from “Exit Insight: Getting to Sold!” (pp. 157-158) available on Amazon.com and Merrell Publishing:

Exit Insight: Getting to Sold!The third element contributing substantially to your retirement lifestyle is the money you receive from the sale of your business. Most business owners do not know the true value of their business, heavily overestimating its worth as we have mentioned repeatedly. This is a huge detriment because if you do not know its value, you are unable to calculate whether or not you are due for a dear or a dire retirement.

The after-tax proceeds from the sale of your business are critical to your retirement comfort. Most business owners assume a happy ending, foolishly confident that a buyer will be ready and waiting to purchase the business at the asking price when the day comes. Yet the chances of that happening are remote without preparation and planning. Just as you would dress up your home for curb appeal, fix the leaks, mow the backyard and put flowers on the dining room table, your business may require several years of carefully considered adjustments to prepare it for sale, so it stands out from the flood of other businesses begging to be bought.

Consulting with a master financial planner trained in understanding a variety of ways to strategically synthesize the fiscal tools available to you for reducing taxes, improving your business’s appeal, increasing your portfolio’s value, and providing the most funds for your retirement lifestyle is the most lucrative and sensible investment you can make.

Whether your financial accordion’s bellows need some steady pushing, the tone chamber requires an adjustment, or the reeds have to be replaced with new ones, your master financial planner will make the accordion sing and the hall dance to the tune of your retirement success.

Do you wonder if the proceeds from the sale of your business will be enough? Don’t wonder any more. Contact the experts at Synergetic Finance now to find out how much your business is worth today, so you can plan for tomorrow.

To your success,

Author Joseph M. Maas





Synergetic Finance


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States with no income tax

Did you know there are six other states besides Washington that don’t charge income tax? Here they are, in alphabetical order:

Wash StateAlaska: The state of Alaska relies heavily on petroleum revenue to cover the state budget.
Florida: Sales tax and property taxes cover government costs in Florida.
Nevada: Gambling-related taxes and fees raise almost a billion dollars for Nevada each year.
South Dakota: This western state gets its revenue from a variety of taxes, including “sin taxes” on cigarettes and alcohol.
Texas: The state of Texas sustains itself through a state sales tax, local sales taxes and property taxes.
Washington: The Evergreen State supports itself through a variety of taxes. Our state sales tax ranges from 6.5% to 9.5% in King County.
Wyoming: This state does not have a personal state income tax or a corporate income tax.

While it may seem appealing to live in a “no income tax” state, these states still pass along their operating costs to residents through other taxes and fees. As the saying goes, there is no free lunch.

Source: Bankrate.com

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401(k) plans: review, monitor and adjust

When you choose Synergy 401(k) to set up your 401(k) plan, you get more than just an objective financial advisor. You get a team of 401(k) experts that will help you grow and nurture your plan from Day 1 to ensure it meets your needs as the business owner, as well as the needs of your employees. Part of that process is reviewing, monitoring and adjusting your plan and its investments.

To help you and your 401(k) plan participants stay on course, we review your goals and objectives with you annually. Does this plan still meet your needs? If not, we’ll recommend adjustments. We will hold quarterly investment review meetings to help you and your plan participants understand your investment choices and the results of those investments in our five-step process.

SFM 401k Monitoring




We are also available any time you or a plan participant has a question about the plan. We can explain everything from salary deferrals and contribution limits to investment performance and hardship withdrawals.

To learn more about how a 401(k) plan can benefit your business, visit our Synergy401k.com site, give us a call at 206-386-5455 or send us an email. We enjoy sharing our expertise and helping business owners create healthy retirement plans that meet everyone’s needs.

 To your success,

Author Joseph M. Maas





Synergetic Finance

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10 ways business owners can save money on taxes

With 2014 behind us, income taxes are on our minds right now. There is little we can do to reduce our tax liability for last year (except setting up an IRA and making contributions by April 15), but this is a good time to start tax planning for 2015. Here are 10 ways business owners can reduce their tax liability:

1.  Closely track tax deductible expenses, using software like QuickBooks or an app like Expensify. Track everything from mileage and business lunches to business travel and moving expenses. If you have employees, add them to your Expensify account to track their expenses as well.

2.  File your taxes on time. This might seem obvious, but not everyone pays their taxes when they’re due, racking up late fees and penalties. Visit IRS.gov for tax filing due dates and circumstances under which the IRS might waive penalties.

3.  If you are anticipating an exceptional year in terms of revenue, consider accelerating the time line on major business purchases to offset this year’s revenue.

4.  Start a profit sharing plan to put away as much money as you can as the business owner. Our team of retirement planning experts can help you choose the right plan for your company and set up the plan to maximize your contributions. Ask us how.

5.  If you own multiple businesses, create an overarching umbrella company to simplify taxes and use the losses of one company to offset the profits of another.

6.  Working from a home office? You may be able to deduct expenses for the business use of your home if (a) you regularly use part of your home exclusively for conducting business, and (b) your home office is your principal place of business. Visit IRS.gov for additional rules and restrictions.

7.  Deduct taxes paid to other municipalities (local, state, foreign, etc.) that are attributable to your trade or business as business expenses.

8.  If you use a cellphone for business, you can deduct the business portion of your bill as an expense.

9.  Using the Section 179 deduction, you can recover part or all of the cost of qualifying property (e.g., office furniture), up to specified limits, rather than recovering the cost through depreciation which takes longer.

10.  You can deduct health insurance premiums, as long as the deduction doesn’t exceed your company’s net profit.

These are just a few of the ways you can reduce your tax liability. For additional suggestions, contact your accountant, give us a call at 206-386-5455 or send us an email. We would be happy to offer our expertise and insight, and to set up a complimentary consultation if you are ready to take that step.

To your success,

Author Joseph M. Maas




Synergetic Finance

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Long-term care insurance explained: part 2

Synergy takes a holistic approach to financial planningIn our most recent blog post, we introduced you to long-term care insurance and explained risk management and how to evaluate a policy, including factors to consider. We continue our discussion below, beginning with benefit flexibility.

Benefit flexibility

A comprehensive policy may be purchased that covers the individual in a nursing home, adult day care center, assisted living facility, his or her own home, or just about any other setting. Or a nursing home only or home care only policy may be purchased.

Most policies will pay 100% of the daily benefit for skilled care, but many policies will reduce the percentage they pay if care is received for custodial care. Some policies will also reduce the benefits depending on where the care is received. For example, it will pay 100 percent for care received in a nursing home but only 80 percent for assisted living. Further, many polices allow the client to choose a lower coverage rate in order to keep the cost of the policy down. In this situation the policy may pay 100% of the daily benefit for nursing home coverage and the client could choose a 50% or 80% rate for home health care.

As long as the coverage is affordable, it is wise to have a policy that pays 100% at any level of care and 100% regardless of the care facility. This way the client can choose where he/she will receive care at the time of claim as opposed to at time of application.

Benefits are paid usually in one of two ways. A policy can be designed to pay for expenses actually incurred (reimbursement) or by indemnity (in cash). In the reimbursement policy the insurance company either pays the client or the provider up to the limit contained in the policy. Here the policy will pay benefits only when eligible services are received. The indemnity method will pay benefits to the client directly in the amount specified in the policy without regard to the specific services received. Most of the policies offered today are reimbursement policies. They will use a pool of money concept or some will pay actual expense up to the daily maximum with any remaining benefit forfeited.

Common provisions in long-term care policies

Maximum Daily/Monthly Benefit:

Most policies pay a fixed dollar amount for each day of care. Benefits can range from $50.00-$350.00 per day.

Lifetime Maximum Benefits:

Most plans have a maximum benefit they will pay. It is usually expressed in years, such as 1, 2, 3, 4, 5, 6 years, or for lifetime.

Waiting Period (Deductible):

Most LTC policies require the client to pay their own way for a specified number of days before the insurance company will begin to pay benefits. They range from 0 to 180, and the shorter the waiting period, the higher the premium. Be careful of the policies that require the days to be consecutive.

Waiver of Premium:

Some policies will waive the future premiums after you have been in the nursing home for a specified number of days. The most common is 90 days, but some companies waive the premium as soon as they make the first benefit payment. One thing to look for in the insurance contract is the requirement for the days to be continuous; this can delay the waiver. Language that does not require the days to be continuous is preferred. Some companies do not waive the premium for care received at home.

Inflation Protection: Since costs inevitably increase, a policy without a provision for inflation may be outdated in a few years. Of course, an additional charge is incurred for this protection.

There are also provisions for a variety of other issues, such as tax-exempt status for premiums, tax incentives, guaranteed renewability, prior hospitalization, pre-existing conditions, etc., so be sure to discuss policy details in depth with your insurance agent.


When asked the question “What is long-term care?” the typical answer would be that it is care provided in a nursing home for old people. In today’s society, the perception of long-term care has changed drastically. Today’s definition has broadened to include a wide range of services that address the health, medical, personal care, and social needs of people with chronic or prolonged illnesses, disabilities and cognitive disorder. Most often it is referred to as providing assistance with the activities of daily living. And it is not just for old people. People of all ages are at risk.

The problem with either definition of long-term care is that it can be emotionally, mentally, physically and financially devastating to not only the individual requiring care, but for the entire family. Some of these challenges have been caused by the social changes in our country and others have been caused by the rapidly increasing economic aspects of providing long-term care services.

With the increasing problems surrounding long-term care issues, the way we handle the risks should be examined from a risk management point of view in order to better evaluate who should buy long term care insurance. The conclusion here is that for many individuals, long-term care insurance is an excellent technique for handling the risk associated with long-term health care issues. However, it is not appropriate for everyone and these people may prefer other risk management techniques more suited to their situation.

For the people who choose to use insurance to handle their long-term care risks, there are several decisions to be made in selecting a contract that will meet their needs. Today’s policies offer both comprehensive coverage as well as limited coverage in tax-qualified and non-qualified contracts. The contracts contain benefit flexibility so each individual’s specific needs can be addressed in designing their coverage. In the end, there are several well-respected companies who offer this type of insurance and with careful analysis, proper coverage should be obtained.

The preceding text is an excerpt from “Exit Insight: Getting to ‘Sold!’” by author Joseph M. Maas. The book is available for purchase at Merrell Publishing or Amazon online.

Have questions or concerns? Do you still wonder if you need long-term care insurance? Give us a call at 206-386-5455 or click here to email us. We’ll be happy to help however we can.

To your wealth,

President of Synergetic Finance
Author of Exit Insight: Getting to “Sold!”

Joe Maas

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Long-term care insurance explained: part 1

Setting estate planning goalsAs a person ages, insurance for long-term care will be a welcome lower cost solution as current costs for care in a nursing home is about $70,000 annually. Our elder population is growing as the Baby Boomers enter their retirement years; before long there will be a significant impact on end-of-life health issues, and mortality rates will increase as this generation becomes ill and dies.

Elderly people typically require assistance with daily activities such as eating, bathing, dressing, etc. This type of care is called long-term care, and may be administered by family members, or in a variety of assisted living facilities. Because the costs for long-term care can be exorbitant and can quickly deplete assets, and because standard health insurance policies exclude long-term care benefits, long-term care insurance can mitigate the effect of excessive expenses.

Risk management

Long term care insurance is available to manage the risk of enormous expenses, typically in the later years of a person’s life when they are living on a fixed income. The risk is great, because most people will not be able to afford the exorbitant cost of the care they may need, and their entire estate can be consumed. Some careful thinking about and planning for this very likely situation is mandatory.

An analysis of the risks associated with long-term care reveals that the only choices available to an individual considering the financial impact of elderly needs are purchasing an insurance policy, or self-funding the costs. A third choice, dispersing your estate to rely on the resources and mercies of Medicaid, is an unappealing alternative.

There are three categories of people when considering the need for long term care. The first group is composed of the multimillionaires who will be capable of self-funding their elderly care needs, either through a personal staff or through an LTC policy. The third group is those individuals with less than $100,000 in resources who will be cared for through Medicaid. It’s the group in the middle that needs to use an insurance risk transfer technique to handle the impending risk.

For this middle group, the issue is focused on determining a reasonable way to finance the risk. People will either retain the risk and take the chance of paying the full cost of care out of their pockets, or they can choose to pay a premium to an insurance company and transfer the cost of covered charges to the insurance company. But there is another option, and that is to use a combination of retention and insurance. This option is usually chosen because people cannot pay or do not want to pay high insurance premiums. Remember, when evaluating LTC insurance, it does not have to be an all or nothing decision.

For some, a long-term care policy is an affordable and attractive form of insurance. For others, the cost is too great, or the benefits they can afford are insufficient. You should not buy a long-term care insurance policy if it will cause a financial hardship and make you forego other more pressing financial needs.

Factors to evaluate

After identifying the potential need for health care, the age, ability, financial situation and marital status of the individual must be considered.


Although policies are available from age 18 to 99, the average client is between 60 and 75. People under 40 are usually still more concerned with retirement and college planning while people over the age of 84 are not likely to qualify for coverage because of their health history.


Underwriting for long-term care insurance is different from that of life insurance since it is the applicant’s ability to function that is analyzed. The underwriting decisions are based more on morbidity (the chance of becoming disabled) than mortality (the chance of death). Underwriters look for diseases, injuries or illnesses that could lead to loss of function. In general, individuals with signs of a chronic condition that would likely lead to a loss of function will not qualify for coverage. Further, as individuals age, their likelihood of qualifying for LTC coverage decreases because chronic conditions begin to set in with age.

Financial Situation: When evaluating if one should purchase a long-term care insurance policy, the financial conditions of the situation need to be considered. Both assets and income must be analyzed to accurately measure the need for insurance.

Evaluating a long-term care insurance policy

The long-term care insurance market place has evolved greatly over the last several years, and there is no shortage of quality policies to choose from. There are several companies selling policies with multiple combinations of benefits and coverage.

The preceding text is an excerpt from “Exit Insight: Getting to ‘Sold!’” by author Joseph M. Maas. The book is available for purchase at Merrell Publishing or Amazon online.

In our next post, we’ll examine benefit flexibility and common long-term care insurance provisions. Until then, please let us know if you have any questions. Give us a call at 206-386-5455 or click here to email us, and we’ll be happy to address any questions or concerns.

To your wealth,

President of Synergetic Finance
Author of Exit Insight: Getting to “Sold!”

Joe Maas


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IRS Announces 2015 Retirement Plan Limits

IRS announces 2015 retirement plan limits.In October, the IRS announced plan limits and cost-of-living adjustments (COLA) for 2015 for retirement plans. Some contribution, adjusted gross income (AGI) and compensation limits have changed, but others remain the same. Here’s what you need to know as you plan your 2015 retirement savings contributions:


  2015 2014
Elective deferrals (401k, 403b & most 457 plans & govt’s thrift savings plan) $18,000 $17,500
Catch-up contributions for participants 50+(401k, 403b & most 457 plans & govt’s thrift savings plan) $6,000 $5,500
IRA $5,500 $5,500
IRA catch-up contributions for participants 50+ $1,000 $1,000
Annual benefit limitation under defined benefit plan $210,000 $210,000
Limitation for defined contribution plan $53,000 $52,000


For more information and additional adjustments, click here for the IRS’s Oct. 23, 2014 announcement. Not sure how this impacts your financial portfolio or your tax liability for 2015? We can help. Send us an email or give us a call at 206-386-5455. We can help you evaluate your current plan and make suggestions for adjustments next year.

To your wealth,

President of Synergetic Finance
Author of Exit Insight: Getting to “Sold!”

Joe Maas

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What is your financial advisor’s fiduciary responsibility?

Author Joseph M. MaasWhen choosing a financial advisor to manage your most precious assets, it is essential to determine if the financial advisor will accept fiduciary responsibility and to what degree. Most plan sponsors are quite busy with the daily business of managing their company, and do not have time for the extra diversion of becoming proficient with the regulations and many details of offering a 401(k) plan to their employees.

Considering the implications of the fiduciary responsibility that will otherwise default to you, unless you are well versed in retirement plans, IRS Code, ERISA regulations, and investment strategies for the range of your employees’ financial needs, you’ll want to have a 3(21) investment advisor sharing partial fiduciary responsibility with you, or a 3(38) investment advisor taking the full burden off your shoulders. Finding the right financial advisor for your company’s plan is very important!

When you’re interviewing a financial advisor, you should find out if the advisor’s company will accept the legal responsibility and become a fiduciary for your plan, and whether as a 3(21) or a 3(38).

In addition, you should expect your financial advisor to access resources that help meet IRS compliance; inquiring about the nature of these resources will help you decide if your company will be sufficiently represented when compliance issues arise. Considering that your company may have a 401(k) committee, it would be wise to inquire if the financial advisor is capable and willing to offer training, education and support to your committee.

Also important is asking about potential conflicts of interest that might occur between the financial advisor and money managers with whom the financial advisor is currently conducting business.

It would be helpful to find out if the financial advisor’s company has a written conflict of interest policy, and how strict it is. It will also help you to sleep at night if you were to find out, should you consider hiring this financial advisor, that none of his or her clients have ever been the subject of an investigation by the IRS or the Department of Labor, or if they have, that matters were settled with positive outcomes which do not reflect on the poor performance of this advisor.

Have questions? Not sure if you have the right financial or retirement plan advisor? We can help. Call us at 206-386-5455 or send us an email to schedule a complimentary consultation.

Coming soon: Author Joseph M. Maas of Synergetic Finance will be releasing his next book in the Insight series: 401(k) Insight: Getting to Retired!

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2014 Retirement Plan Limits

Though the New Year is just around the corner, there is still plenty of time to make contributions to your retirement plan. Here are the applicable limits for 2014:

2014 401(k) Limits  
401(k) elective deferrals $17,500
Annual defined contribution limit $52,000
Annual compensation limit $260,000
Catch-up contribution limit $5,500
Highly compensated employees $115,000


 2014 Non-401(k) Limits
403(b)/457 elective deferrals $17,500
SIMPLE employee deferrals $12,000
SIMPLE catch-up deferrals $2,500
SEP minimum compensation $550
SEP annual compensation limit $260,000
Social security wage base $117,000

Have a question about your 2014 retirement plan contributions or limits? Need help setting up a plan before year end? Synergetic Finance can help. Contact us today to set up a complimentary consultation.

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