Bill Chetney Jr. - Why Say "No" to Free Money?

So what are the tax credits? I'm gonna be doing this at a very high level.

I'm not a tax professional, but, um, I do know that this is, uh, a great opportunity.

So there's two credits that are gonna be available to you in Secure 2.0.

The first one is gonna be for administrative costs.

So you get, if you have 50 employ- uh, employees or less, you're going to have, um, a benefit of up to $5,000 for administrative costs, and that's, uh, 250 per head, right? So if you have one employee, you get $250, right? If you have 20 employees, you've hit the cap of $5,000 in terms of a tax credit for the administrative costs.

That's for, like, your record keeper, your TPA, uh, whatever kind of, uh, expenses are there to set the plan up, right? That's, that's number one.

And for any advisors doing benchmarking, that is a healthy sum to get things up and going.

Uh, I mean, would you agree with that, Eric?

Y- yeah.

W- and, and y- you've already hinted at it, Bill, when you think about it, and just, I'm probably stating the ob- obvious.

We're saying tax credit, not tax deduction, right?

Yeah.

Money in your pocket.

So yes, it's pretty healthy for a company that size.

100%.

A tax credit.

If you get a tax credit for $1, the government is giving you a dollar.

So that $5,000 is, is $5,000.

It is not a deduction, uh, getting into another bracket.

Number two is for the employer match, right? So now you get a match of 1,000, uh, tax credit of $1,000 per employee for a qualified contribution from the employer to that employee, right? That, again, is a huge amount of money coming back to the employer.

And what's happening? Retirement plan is being set up.

The cost of that is being supplemented by the government with these tax credits.

And now you're being incentivized to give money to employees, and what do, what do advisors do when they, uh, approach a participant? They say, "What's the bare minimum I should do?" Meet the match.

Why? Because we've said that is free money.

I'm doing air quotes for those that are listening, right? That, that is, that is 101.

So what are the tax credits? I'm gonna be doing this at a very high level.

I'm not a tax professional, but, um, I do know that this is, uh, a great opportunity.

So there's two credits that are gonna be available to you in Secure 2.0.

The first one is gonna be for administrative costs.

So you get, if you have 50 employ- uh, employees or less, you're going to have, um, a benefit of up to $5,000 for administrative costs, and that's, uh, 250 per head, right? So if you have one employee, you get $250, right? If you have 20 employees, you've hit the cap of $5,000 in terms of a tax credit for the administrative costs.

That's for, like, your record keeper, your TPA, uh, whatever kind of, uh, expenses are there to set the plan up, right? That's, that's number one.

And for any advisors doing benchmarking, that is a healthy sum to get things up and going.

Uh, I mean, would you agree with that, Eric?

Y- yeah.

W- and, and y- you've already hinted at it, Bill, when you think about it, and just, I'm probably stating the ob- obvious.

We're saying tax credit, not tax deduction, right?

Yeah.

Money in your pocket.

So yes, it's pretty healthy for a company that size.

100%.

A tax credit.

If you get a tax credit for $1, the government is giving you a dollar.

So that $5,000 is, is $5,000.

It is not a deduction, uh, getting into another bracket.

Number two is for the employer match, right? So now you get a match of 1,000, uh, tax credit of $1,000 per employee for a qualified contribution from the employer to that employee, right? That, again, is a huge amount of money coming back to the employer.

And what's happening? Retirement plan is being set up.

The cost of that is being supplemented by the government with these tax credits.

And now you're being incentivized to give money to employees, and what do, what do advisors do when they, uh, approach a participant? They say, "What's the bare minimum I should do?" Meet the match.

Why? Because we've said that is free money.

I'm doing air quotes for those that are listening, right? That, that is, that is 101.