By James Barrera

Before moving forward put together a business plan. It’s not necessary to expend a lot of time on this document, as long as you can clearly state your intended strategy and clearly define the scope of your intended sales, marketing, and financing efforts.
Starting a business at any age can be a daunting experience, but doing so after age 50 offers its own challenges and opportunities. The risk factor is as high as it is for a business owner of any age. On the other hand, you have a depth of experience and knowledge that is not present in most budding 25-year entrepreneurs.
If you are considering a startup of some kind in your fifties or later be sure you can answer the following questions.

Are you prepared?

This is no time to jump into the marketplace just to see what happens. If you think you have a great business idea then test it against a thorough market analysis. You need to know who your potential competitors and customers are, but even more critically, if there’s likely to be a genuine demand for your product or service.
Before moving forward put together a business plan. It’s not necessary to expend a lot of time on this document, as long as you can clearly state your intended strategy and clearly define the scope of your intended sales, marketing, and financing efforts.

Do you have passion?

For business owners aged 50 and older, there is no getting around a simple fact: you’re just not as young as you used to be. Starting a business requires the stamina to put in many long hours upfront. Not everyone can meet the physical demands of hard work and lack of sleep. You must have passion for this new business. Making money cannot be your sole motivator – since you may not see profits in the early stages.

Have you looked at the costs?

You are going to need start up funds. Whether you put up your hard dollars, obtain a loan for financing, or tap into your retirement funds tax and penalty free you need to find an accountant experienced in new business ventures to realistically assess the likely startup costs. The plus side here is that by age 50 or greater many have managed to put away a substantial amount of money in their 401k/IRA accounts. DRDA’s self-directed 401k program – the BORSA Plan – would give you access to these funds without tax or penalty erosion.

How can you build on your experience?

Starting a business later in life gives you the unique opportunity to draw on a lifetime of experience. By now you have a much better sense of your strengths and weaknesses. Chances are you have also accumulated a network of contact who can help you along the way, either directly or through referrals to people who can help you.

Are you considering business ownership at age 50+? One of our Business Consultants would be happy to offer you a free initial consultation. Give us a call at 281-488-2022.

By: Bryan Uecker, QPA, QPFC, AIF, AIFA

The IRS has announced the 2025 contribution and benefit limits in Notice 2024-80, released on November 1.

Key Contribution Limits for 2025:

• 401(k), 403(b), 457, and Thrift Savings Plans: The standard contribution limit for these plans increases to $23,500, up from $23,000 in 2024.
• Catch-Up Contributions for Ages 50 and Over: The catch-up contribution limit remains at $7,500, allowing individuals aged 50 and older to contribute up to $31,000 across 401(k), 403(b), most 457 plans, and the Thrift Savings Plan.
• Special Catch-Up Contributions for Ages 60 to 63: SECURE 2.0 introduced an additional catch-up provision for individuals ages 60 through 63. In 2025, this special catch-up amount is $11,250 for 401(k), 403(b), and most 457 plans, allowing for a total contribution limit of up to $34,750 for these participants.
• Defined Benefit and Contribution Plans (IRC Section 415): The annual benefit limit for defined benefit plans rises to $280,000 (up from $275,000), and the limit for defined contribution (DC) plans increases to $70,000 (up from $69,000).

Other Key Adjustments:

• Annual Compensation Limits: The maximum compensation considered for qualified plans is now $350,000 (up from $345,000).
• Top-Heavy Plan Key Employee Definition: Limit increased to $230,000 (up from $220,000).
• Highly Compensated Employee Definition: Raised to $160,000 from $155,000.

These 2025 updates, including special catch-up contributions for ages 60-63, provide increased flexibility and savings opportunities for retirement planning.

By James Barrera

Which are you – Manager, Leader or Both?

In an ever-increasing competitive workplace, how we show up matters. If you want to get ahead, you must show up as a leader – not only a manager. The difference between leadership vs management is big, and the distinction between the two matters. Not every manager is a leader, and not every leader is a manager, the ability to balance both is a feat many of us aspire to achievement.

A successful business owner needs to be both a strong leader and manager to get their team on board to follow them towards their vision of success. Leadership is about getting people to understand and believe in your vision and to work with you to achieve your goals while managing is more about administering and making sure the day-to-day things are happening as they should.

What Is Management?

Managers make the business world go around. When goals and objectives are set, managers are the implementers. They get things done. Management requires planning, organizing and controlling the various aspects of projects and the related outcomes. Managers are process oriented. They rely on other people, primarily subordinates, to complete tasks and move projects along. Managers delegate set deadlines and evaluate work product. They also course-correct when needed.  

What is Leadership?

Management is an essential skill required to perform effectively. It is also a foundational skill that can evolve into leadership. But leadership is a combination of personal qualities that inspire others to follow. A leader is not a power of authority, but a process of social influence which maximizes the efforts of others toward the achievement of a greater good.

What is true leadership? Many times, when you come across the word leader you see the word follower aligned in some way. Leadership is not about attracting others to follow. This conveys a sense of power, authority, and control that might serve well in the short term by getting others to fall into line through conformity, but it doesn’t create the conditions necessary for sustaining change.  

Great leaders don’t tell people what to do, but instead drive them to where they need to be. There is no agenda to create a group of followers or disciples. True leaders know that their success is intimately tied to the project and its results. The path to achieve a goal is predicated on how effective the team responds and interacts with each other and the leader. It is a team approach where each person in the organization knows that he or she has an important role to play. Leadership is all about action not position or title.

Some of the best leaders never had a title. What they did have was the tenacity to act on a bold vision for change to improve outcomes and increase performance. These people may be overlooked because they don’t possess the necessary title that is used to describe a leader in a traditional sense. A Leader, from the perspective of society is not a virtue associated by a title, such as manager, director, supervisor, but more by character, presence and action.

The fact that we are surrounded by these people each day both physically and virtually. They are colleagues, mentors, and staff who have all acted to initiate meaningful change in their teams and work environment. These people don’t just talk the talk, but they walk the walk. They lead by example in what might be the most impactful way possible – Leading by Example. These true leaders do not expect others to do what they are not willing to do. The best part is that these unsung heroes do not need a title to make a difference. They also don’t need a title to be a force of change.

If you look on the internet you will find thousands of articles depicting traits and styles of what makes a good leader. For most of us we have identified what traits are important by evaluating our current supervisors and determining what differentiates them from being a good leader. In retrospect we tend to place ourselves in their shoes and begin envisioning how we would do things differently. Our impressions distinguish what attributes we place value on to determine what makes a good leader.

The best leaders work to improve themselves Continuously and do the following on a consistent basis:

Learn

Learning is the work. Great leaders take professional growth seriously as they know there is no perfection in any position, just daily improvement. Leaders make the time to learn and get better daily. They also make their learning visible to inspire others to follow suit. Leaders who love their work are always learning.

Empower

A key element of effective leadership is to empower others to take risks, remove the fear of failure, and grant autonomy to innovate.  People that are empowered find greater value in the work they are engaged in. Empowerment leads to respect and trust, which builds powerful relationships where everyone is focused on attaining specified goals.

Adapt

 Everything can change in a heartbeat.  As such, leaders must embrace a sense of flexibility and openness to change accordingly in certain cases. The ability to adapt to an array of situations, challenges, and pressures are pivotal to accomplish goals. Success in life is intimately intertwined into an organism’s ability to adapt in order to survive. As leaders adapt, they evolve into better leaders.

Delegate

A leader knows the importance of communication and trust. The decisiveness to delegate certain tasks and responsibilities is paramount for team-esteem. It builds confidence in others in their ability as co-leaders of an organization even if they don’t have a fancy title. It also allows leaders to apply more focus to areas of greater importance. 

Engage

In the sharing economy there might not be anything more important than information. Leaders understand this fact and develop strategies to authentically engage their clients through multi-dimensional communications, by taking control of public relations, and developing a positive brand presence. Increased engagement results by meeting prospects where they are at, encouraging two-way communications, and becoming the liaison of the brand.

Reflect

It is quite difficult to find a great leader who does not reflect daily on his or her work.  Reflection in a digital world can take many forms and results in greater transparency. It is not how one chooses to reflect, but an emphasis to integrate this process consistently that defines a great leader.

Serve

It’s not just what you say, but more importantly what you do.  The most effective leaders work constantly to meet the needs of others while building them up in the process. They make it clear that it is not about them. Serving others taps into one’s heart and soul. It is in the moment of service to others that true leaders rise up in esteem, prestige, and industry.

You are in Control

The perception of the term leader is evolving, and it begins with you regardless of your position. As an aspiring leader, setting high standards requires that you develop a strategic and compelling vision for who you want to be and what you want to achieve. It is that vision that will provide you with the drive and perseverance to attain your leadership goals. Herein lies the first key in transforming your world into a better place. Never underestimate the power that you have. You are part of the solution!

Are you interested in learning more about DRDA’s ROBS structure, the BORSA™ Plan? Contact Bryan Uecker by sending an email (bryan.uecker@drdacpa.com) today for a free consultation.

By: Bryan Uecker

Navigating the regulatory landscape of qualified retirement plans can be complex for plan sponsors and administrators. The Department of Labor (DOL) and the Internal Revenue Service (IRS) play pivotal roles in overseeing these plans, but they have distinct requirements and regulations. Understanding the differences between the two can help plan sponsors ensure compliance and effectively manage their retirement plans.

DOL Requirements:

The DOL primarily focuses on enforcing the Employee Retirement Income Security Act (ERISA), which sets standards for the operation and administration of retirement plans. Some key DOL requirements for qualified plans include:

1. Reporting and Disclosure: The DOL mandates that plan sponsors provide participants with various disclosures, such as the Summary Plan Description (SPD) and Summary of Material Modifications (SMM). These documents inform participants about their rights, benefits, and obligations under the plan.

2. Fiduciary Responsibilities: Plan fiduciaries have a duty to act prudently and solely in the interest of plan participants and beneficiaries. The DOL oversees fiduciary conduct, ensuring that fiduciaries fulfill their obligations and avoid conflicts of interest.

3. Vesting and Participation: The DOL sets rules regarding vesting schedules and eligibility criteria for plan participation. These regulations aim to protect participants’ rights to their accrued benefits and ensure equitable access to retirement savings opportunities.

IRS Requirements:

While the DOL focuses on ERISA compliance, the IRS administers the tax laws related to qualified retirement plans. Key IRS requirements for these plans include:

1. Plan Qualification: To receive favorable tax treatment, retirement plans must meet specific qualification requirements outlined in the Internal Revenue Code (IRC). These requirements cover various aspects of plan design, such as contribution limits, distribution rules, and nondiscrimination testing.

2. Plan Documentation: The IRS requires plan sponsors to maintain up-to-date plan documents that reflect the terms and conditions of the retirement plan. These documents must comply with IRS regulations and be available for review by plan participants and government agencies.

3. Tax Reporting: Plan sponsors are responsible for filing annual tax returns and informational forms with the IRS, reporting contributions, distributions, and other plan-related activities. Compliance with IRS reporting requirements ensures that the plan maintains its tax-qualified status.

Comparison:

While both the DOL and IRS regulate qualified retirement plans, they have distinct areas of focus and enforcement authority. The DOL emphasizes participant protection, fiduciary oversight, and transparency through disclosure requirements. In contrast, the IRS focuses on tax qualification, plan documentation, and compliance with tax laws to maintain the plan’s favorable tax status.

Conclusion:

Understanding the differences between DOL and IRS requirements is essential for plan sponsors and administrators tasked with managing qualified retirement plans. By adhering to both sets of regulations, sponsors can ensure compliance, protect participants’ interests, and maintain the tax-qualified status of their plans. Staying informed about evolving regulations from both agencies is key to successfully navigating the complex landscape of retirement plan administration.

By: Bryan Uecker, QPA, QPFC, AIF, AIFA

Self-directed IRAs and BORSA/ROBS (Rollovers for Business Start-ups) offer distinct approaches to investing in businesses:

Business Involvement

BORSA/ROBS: Requires active participation in business operations, including receiving a salary if deemed reasonable. Structured through a C corporation, which is the sponsor of the retirement plan.

Self-directed IRAs: Passive investment vehicles where IRA owners cannot engage in business management or take salaries. Doing so could violate IRS rules on prohibited transactions.

Tax Considerations

BORSA/ROBS: Subject to regular corporate taxes; UBIT (Unrelated Business Income Tax) does not apply since the C corporation is taxable.

Self-directed IRAs: Income from business activities may trigger UBIT if unrelated to the IRA’s tax-exempt purpose.

Loan Guarantees

BORSA/ROBS: Allows funds to be used as a down payment for business loans, including SBA loans.

Self-directed IRAs: Cannot guarantee loans, maintaining separation between IRA assets and personal liabilities.

Ownership Flexibility

BORSA/ROBS: Enables up to 100% ownership of the business, providing full control.

Self-directed IRAs: Direct ownership risks violating IRA rules if exceeding certain ownership thresholds, jeopardizing tax benefits.

Conclusion: Self-directed IRAs are ideal for passive investors seeking hands-off involvement, while ROBS empowers owners with direct control and tax advantages through a C corporation setup.

A Persuasive Essay on the Benefits of the ROBS Strategy

By: Eva Jiang, M.B.A., M.S.

Recently, DRDA hosted an enlightening webinar titled “Unlocking Success: Navigating the ROBS Journey,” aiming to demystify the ROBS (Rollover as Business Start-up) strategy for aspiring entrepreneurs. This essay argues that the ROBS strategy offers a unique and advantageous pathway for individuals to leverage their retirement funds to start or buy a business without incurring taxes or penalties. The webinar provided an in-depth exploration of the ROBS strategy, addressing common concerns and illustrating its potential benefits.

Setting the Stage for Success

The webinar began with the foundational steps necessary to ensure a distraction-free environment, emphasizing the importance of focused attention when dealing with complex financial strategies. Attendees were encouraged to silence their phones and find a quiet place, setting the stage for a productive session. The introduction of the Q&A chat box underscored the interactive nature of the webinar, allowing participants to engage directly with the experts, thereby enhancing their understanding of the ROBS strategy.

Expert Insights and Comprehensive Understanding

The session featured two distinguished speakers: Doug Dickey, a Partner at DRDA with credentials such as CPA, CVGA, and CEPA, and Bryan Uecker, the Retirement Plan Manager with qualifications including QPA, QPFC, AIF, and AIFA. Their combined expertise provided a thorough and reliable foundation for understanding the ROBS strategy. This high level of expertise is crucial for individuals considering using their retirement funds to invest in a business, as it ensures that they receive accurate and comprehensive information.

The Mechanics of the ROBS Strategy

Doug and Bryan explained the ROBS strategy in detail, highlighting its core components: forming a C Corporation, establishing a 401(k) Profit Sharing Plan, and rolling over retirement funds into this plan to invest in a new business. This approach allows individuals to use their retirement funds without incurring the taxes and penalties typically associated with early withdrawals. The ROBS strategy thus provides a viable and advantageous option for entrepreneurs who lack sufficient liquid capital but possess substantial retirement savings.

Addressing Common Concerns

A significant portion of the webinar was dedicated to addressing common concerns and questions from the attendees. These included:

Compliance with IRS Regulations: Ensuring compliance with IRS regulations is a primary concern for anyone considering the ROBS strategy. The speakers provided detailed guidance on meeting all necessary requirements, emphasizing the importance of adherence to avoid legal complications.

Eligible Retirement Funds: The types of retirement funds that qualify for ROBS were clarified, providing attendees with a clear understanding of their eligibility.

Tax Benefits: The tax advantages of operating under a C Corporation structure were highlighted, showing how the ROBS strategy can lead to significant tax savings.

Exit Strategy Costs: Insights into the expected costs of an exit strategy were shared, helping attendees plan for the future and understand the long-term financial implications of their investment.

The Value of Personalized Consultation

As the webinar concluded, DRDA offered attendees an exclusive opportunity for a complimentary one-hour consultation. This personalized advice is invaluable for individuals seeking to tailor the ROBS strategy to their specific circumstances. Such consultations can address unique challenges and provide customized solutions, further enhancing the appeal of the ROBS strategy.

Stay Connected

For those with additional questions, the speakers provided direct contact details. Bryan’s email and phone number were shared, along with a link to schedule a consultation. “We’re here to help you on your journey,” Doug assured, his sincerity resonating through the screen.

Bryan Uecker: bryan.uecker@drdacpa.com | 281-954-6004

Schedule a Consultation: Complimentary One-Hour Consultation

Final Thoughts

As the webinar concluded, there was a sense of accomplishment and excitement. The attendees had gained valuable insights into the ROBS journey, feeling more empowered to take the next steps in their entrepreneurial endeavors. The DRDA team was grateful for the opportunity to share their expertise and looked forward to continuing to support these aspiring business owners.

Thank you to all who joined us. Stay tuned for more from DRDA as we continue to help unlock success in entrepreneurial journeys.