Business Innovators Radio - Interview with Renée Kennedy, President of AAA Life Solutions Discussing a Bold Approach to Business Planning

Episode Date: June 19, 2023

Renée Kennedy brings over 25 years of industry experience to the table. Our priority is always our clients and their financial stability, which is why we listen to their objectives and design innovative, personalized strategies that meet their unique needs. Our focus is on customizing employee benefits plans for businesses to reduce or eliminate costs, while offering tax savings. We also specialize in life insurance strategies, 401(k) rollovers, and more to help individuals and businesses build tax-free retirements, secure long-term care and death benefits, and more.At AAA Life Solutions, we always put clients first, with excellent customer service and up-to-date insurance strategies tailored to their individual needs. We do our due diligence to ensure that we make the right decisions for our clients, knowing that our choices will affect them for a lifetime.We provide peaceful solutions in uncertain times.Learn More: https://aaalifesolutions.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-renee-kennedy-president-of-aaa-life-solutions-discussing-a-bold-approach-to-business-planning

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with this, Renee Kennedy, who's the president of AAA Life Solutions, and we'll be talking about a bold approach to business planning. Renee, welcome back to the program. Thank you. Glad to be here. Hey, so we probably don't have nine and a half hours to talk about business planning.

And we certainly don't have enough time to talk about the bold approach because I love that sound. You know, I don't want to talk about something that's regular, plain and standard. I want to talk about that bold approach to business planning. So when you're working with clients who are business owners, where do you start regarding business planning? You know, my husband and I have owned a business. business, a service business for the past 27 years. And so I've learned a lot just from being in the ditch, you know, you're always just solving problems. And I think sometimes business owners get so busy with the day to day of solving the problems that are right in front of them that they have

a hard time looking down the road and saying, well, what else is out there? What can I do to protect my business and to protect my employees and protect my family. And they kind of just get hung up. So I guess one of the things that I did was I wrote a book called A Bold Approach to a business plan or a quality plan. And so people can get that on our website if they like. But you know, it's really hard as a business owner to get out of your own way sometimes and just look for things that are new, that are different, that they just haven't thought of. Yeah. Well, and that brings up a thought that I was going to mention, which is sometimes we got to get out of our own way,

and sometimes we're too close to the forest to see the trees. And so I think that is a huge, huge piece that people need to realize is sometimes you want to be, you know, oh, I'm making this point or I'm, you know, working on, working on my business, not in my business, but sometimes you need that external third party point of view. Yeah, and I think that's what gave us such an advantage over the past 27 years was that I was kind of looking at it from the financial perspective, because that was the lens that I saw so many things. And my husband was in the operations administration day to day stuff. And so I could kind of swoop in and take a 30,000 foot view and say, okay, let's work on this area.

you. Let's work on this. Let's work on that. And it was a very good compliment to what my husband was doing because he didn't have to worry about it. And I think sometimes that's what business owners needs. They need someone. And you can pay a coach. And we've had outside consultants, but it's just different when those people are not an actual business owner themselves. If they're not a business owner of a service business, they don't understand the service industry. They could understand the number. because, you know, it's a financial deal always. But, you know, that 30,000 foot view is so important. And people just don't know what's out there. Yeah, you got it. And I think the 30,000 foot view and the external perspective, that's a huge, huge takeaway. So let's talk a little bit about some of that business planning, that bold approach. What makes your approach bold as opposed to a standard approach? I think it's because we work on what needs to be taken care of first. You know, we go through not a long, intense fact finder, but just some quick questions to find out exactly, first of all, what have they already done? I don't want to go in and just clean house because I think

we have to leverage our time as a business owner and every single thing that you do, you're constantly leveraging your time because it's so, it's such a rare and precious commodity, right? And on the bold approach, what we do is sort of like a business, financial doctor, so to speak. We'll go in and write a prescription for maybe they need health benefits. Maybe they need to know about, you know, ancillary things. Maybe they're not utilizing the pre-tax options on everything. You know, we just kind of look at all of that. And then we look at their, what are they offering their employees? 78% of employees now say that they're afraid they won't be able to retire, period.

Wow. So last year, there was a new act that came into play, and the Secure Act 2.0, it was signed into law the last day of the year, and it was 4,200 pages of tax law. And so when I started looking at all of that, and I realized my CPA did not even have a summary of what was in that tax law for business owners, I wrote a book, which is summarized all of the benefits that employers can use for their employees. And it's called a bold approach to a quality plan. And so, you know, people just need the 30,000 foot view, and that's why I wrote that book,

so that business owners can have a quick guide, have it spelled out with easy to understand definitions if they need that. If they don't, then they can just get to the good part. So it's kind of written for a wide variety of business owners. Yeah, I love that. because, you know, it doesn't have to be business owners who are specializing in this niche. If you're a business owner, there are certain tax opportunities, let's call it that. Because I feel like sometimes when people hear about, oh, this tax deduction that you can get the little known, people feel a little bit scared that, ooh, what if it's wrong?

Well, out of 50, 60, 70,000 pages of the tax code, there's going to be some things you don't know to take advantage of. And if Renee Kennedy has found some opportunities that, hey, you know what, you should consider this or here's an opportunity to reduce your taxes, that's huge. What are some of those low-hanging fruit that people, business owners, don't really realize on saving and lowering taxes that now once you bring it to their attention, it's like, that makes some sense. Well, if someone has 50 or less employees, they're probably used to, you know, if you have 50 or less, you're not required by law to offer health and but they may not know that if they don't have a 401k plan or one that is active in the last three years, that the government is offering tax credits for them starting up a plan. And they will give you up to a thousand dollars tax credit for up to 50 employees. Now, a tax credit is different than a tax deduction. And these tax credits have nothing to do with the employee retention tax credits

that business owners have just been lamb blasted with. I mean, I can't even tell you how many calls I get a day saying, oh, you get 26,000 per employee, blah, blah, blah, blah. I'm so sick to hear that. I could just vomit. It's terrible. But that's not what this is. And so I think some of the people are thinking, I don't even want to talk about tax credits.

I'm like, wait a minute, you want to talk about this one because they will reimburse you up to $1,000 per employee tax credit on tax deduction. And the other thing is they will get. give you a tax credit for expenses per employee. So it's $250 per employee for this plan. And without getting too deep into it, you know, this is just one thing out of about 50 that they can look at it,

say, well, I've had a 401K that doesn't apply to me. Okay, so you've got the pre-tax bucket all nailed down. And, you know, people are probably losing money. And if they don't have anybody helping them manage that. They need help. They need help right away because the market could go down again in September. And these employees, they don't know what to do. They just keep putting money in and nobody's really helping them. So they need to help managing their plan. The second thing is they need another option besides a taxable bucket in the future. Because if all they have is 401k IRA, everything that they do, they're a partner with Uncle Sam.

But you need some things on the outside of that that can do. a lot of things. Sometimes we called it an alternative to 401K plans. And that is a very easy account to set up for people where they can save money, participate. They've got, you know, they can use the, they has a death benefit as permanent and they've got long-term care if they need it. It just has so many things. And if the business owner is maxing out the 401k, this other account is something that they can utilize that if they want to keep it liquid, they can. And that's been, you know, you can't get to that 401K stuff without, you know, creating a loan and that kind of thing. And maybe triggering taxes if you withdrew it and, and penalties. So this other type of a financial

instrument would be a big benefit for the business owner because then they look great to the employees because the employees go, ooh, this is a, you know, long term down the road growth. But if I need to get at it, I can without triggering potential issues. Exactly. And a lot of times people will quit because they need the money in their 401K for some kind of personal crisis. And, you know, a lot of business owners become like the family bank for a lot of their employees. And so we've come up with a way that they can help the employee be their own bank. And they can put money in there if they want to. They just have to have it be 100% vested when they give it to the employee. So, you know, it's just so good to help the employer not have to worry about it and to have some alternatives that are not in partnership with Uncle Sam because we know taxes are going up. They are absolutely going up. We're in the lowest tax environment we have ever been in right now. And when I ask people, what do you think taxes, how, what do you think about taxes? Oh, they're terrible. They're high. And I'm like, no, they're not. They're the lowest. You need to be paying taxes right now. You know.

pay some taxes now so you don't have to kick the can down the road. You know, you said a word that I want to go a little bit deeper on to help make sure people really get this. You said the word partner. And I think if a business owner is like, hey, do you, what percentage of the business do you own? Oh, I'm 100% owner. Okay, that's cool.

Hey, but did you realize that somewhere buried in the fine print of your business articles of incorporation, you have a silent partner that has full control of your business? Of course, I don't. Well, you kind of do. you know, the government, Uncle Sam, because their partner is they can come get a whole lot of stuff if you're not doing the right thing. They're charging you this if you don't pay that in withholdings and all that. That's a big aha for people to realize that if you can mitigate as much as possible the way that quote unquote partner is interacting with your business, that's a huge benefit to your cash flow. Right.

And there's so much compliance that is not being done on these qualified plans. you know, they start it, and then they're just in the day-to-day workings of their business, and they don't know if that 5500 has been filed. I could go right now and pull a list of 100 businesses that have 401Ks, and I guarantee you 70% of them would be out of compliance. And they just don't know. They don't know. So that can be a huge penalty for a business.

Well, I was just going to go there. And we don't need to get into the weeds. but if you're not set up the right way, I remember talking to someone years ago that, hey, if you're a business and you've, you know, someone said, oh, we'll help you set up the 401k, but really the business owner is the one of record. If you don't have the right thing, notified, documented, the right list of opportunities for the employees, all of a sudden, you could be in a heap of hot water if there's something goes wrong there because now you're the plan administrator. You didn't really intend to be. So, you know, there's a lot to keep in mind with that. And we can kind of leave it at that. But I think that there's a lot of things that business owners need to realize

regarding providing these kinds of opportunities for their employees. Yeah, I agree. And some of the states have even come up with their own laws that say, you've got a year. I think it's the end of this year or the end of 2024 to set up a retirement plan for your employees. And if you don't, you're going to have to pay a penalty. Now, I know Colorado is one. and there are multiple others.

But when I was talking to a business owner in Colorado, he's like, these business owners don't even know that this is a law. They haven't even gotten a piece of paper that says, hey, you need to do this. Because why? Why would they do that? They would say, well, you know, what is it that police officer says? Ignorance of the law is no excuse.

Well, that's kind of the way they're going with this retirement stuff by state. And people really need to check the laws in their state and see if there's a time crunch that they need to be aware of on opening these accounts. But, you know, if they need help, that's what we're here to do. We don't want anybody to feel overwhelmed. We just want them to know that, hey, we are here to answer your questions. We're here to serve you and to help you. And if it's a fit, great. If not, you can still have the information.

It's on our website. That's amazing. You know, another thing I want to bring up, you kind of really dial in the, benefit that you bring to business owners with this bold approach, right? Because we talk about some unique different things. Recruiting and retaining. So if we had an HR specialist on the interview with us right here, they could probably point to a lot of research that says, oh my goodness, when an employee leaves a company, it will cost the company X number of dollars and all of this onboarding and offboarding and training and literal hard dollar cost when

someone leaves the company. And you can put a dollar figure to that. I don't know the number, I know that that's the case. So when you can have this bold approach and the business owner has wonderful ways to show their employees that they are treating them well with some of these unique financial instruments, isn't that going to help recruit the best talent and retain the best talent, which has a positive effect on the bottom line? Absolutely. It does. And the other thing that employers may not be aware of is, you know, with everything with the government, you can't discriminate. And I'm not talking about race or gender or anything like that. I just mean it's across the board. You do one for one employee. You've got to do it for all. But there are instruments outside

of these qualified plans where you can set up special accounts for special employees. If you want to rank it based on merit instead of, you know, just cross the board being fair to everyone based on the risk of guidelines. So if you wanted to do something special for Joe, because, you know, he works hard and he's been there 30 years, you can set up a separate instrument for him and you can put more money in for him. And what that does is just it helps the loyalty of employees. It helps the camaraderie. They feel vested in the company. And that's really the most important reason why you want to keep these good employees are that they're really adding value to your business, which brings me into what happens if Joe leaves? How much is that going to cost you, like you said,

but is it something that you can't replace 20 years of experience? So maybe you have a buy-sell agreement or a key man agreement. You know, those types of things that can get, I think the last a guidebook that I had was like three inches big. You know, that's how wide and thick it was with all the different plans and you could set up for individual employees based on what you wanted that account to do. What is the job? And so just like you look at your business and say, well, my business is blank. Well, I look at it and say, well, what is the purpose of this account?

Okay. The purpose of 401K is we can. can share profits. You've got profit sharing. You've got all these different things without getting into the weeds. But they all have a job to do. And we all need to, we just need to make sure that as business owners, we're protected. And let's say your son or daughter are part of the business. You know, how is the business going to flow to your beneficiaries? What if two children are in the business and two aren't? You know, that is a big thing. And so when I say bold approach, I'm talking about. I'm talking about rapid fire machine gun type of approach. We look at it and we go, okay, bam,

bam, bam, bam, we need to do that. And then we need to do that. And so it's just bold and it's direct and it's quick and it's decisive. And we just help people get to where they need to go. I love it. And you know, I wanted to just to draw attention to that one, you know, when you have the top, top, top, top key employees, right? Not your frontline employees, you know, you're going to treat them right. But some of these top ones that it's like, wow, if we could just land that person, we would just go to the next level or we need to keep these people because they are the backbone of our company. When you can create these custom type, you know, it's almost like a private pension if you were to think of it like that, but these using these unique financial

instruments to go, hey, come on in here. Now this is confidential. But let me tell you what I've got for you. We've got this plan or this product or this tool where we're going to set this up and you're going to get these benefits. All of a sudden, they feel like, wow, you know, you already treat us good and we already have the benefits, this and that, but you're giving me this. And now that puts that, you know, like back in the 80s, I think it was, I remember here, the golden handcuffs, you know, your handcuff them in, but it's golden because they appreciate it. So that's a big, big point. It's not right for everybody, every company and every employee, but when it's right, I would

think that it's just hitting on all cylinders. Yes. And it also allows that employee to have deferred compensation in the future. So what if that person has a spouse that's working and they don't want to take that income this year? Well, what if you put it in an account and they just paid a percentage of taxes on whatever you gave them? But then in the future, that money could grow and when they take it out, it would be tax-free. And if you're not limited on how much you can put in there, I mean, that is so huge. And most business owners have just never heard of it.

They don't know how it works. And basically with the way the banking system is, business owners need to be looking for ways to be their own bank with some protections in place without the compliance of all those things that they would have to do if they were a bank, you know. And then let's just wrap up with this thought, because I think when someone is hearing like, oh, my word, these sounds so amazing. And you haven't told me what it is specifically. So I guess it's too good to be true. these are things that are proven and got decades and decades and sometimes from what I understand almost 100 years worth of high proven track record of success and top banks use these products in their, you know, to put their money. So this is not some newfangled idea. This is something that's

proven and I think that's important to know as well. Absolutely. And I have it. I have three of these accounts myself. I think you have it. I mean, wealthy people have been using. this for years, you know. And so it's just the average business owner just doesn't know how it works. And, you know, let's, you know, let's tie in on this too. I've heard that also, in this correct where I'm wrong, but I've heard that Walt Disney had one of these accounts and used it to start the first Disney world back in the day. Yep, he did. He absolutely did. And, you know, it also kept a couple of other business owners from going bankrupt, you know, the key. He's a key. fried chicken is one and McDonald's is another.

And so when you're looking at the risk scale, it's very low on the risk scale, very, very low. And there's guarantees in place. And there's just, if you could do five things with one instrument, why wouldn't it? You know? Right. And why wouldn't you at least reach out and go, Renee, at least take a peek and see what this could look like for us. We're not going to commit to pulling the trigger and do anything, but show me what we could do. And if that's the case with someone listening, what's the best way they can learn more and then reach out and connect with you?

Really, they can just send me an email at info at aAA lifesolutions.com that goes directly to me. Or they can call us at 901, 508, 2433, and we'd be happy to set up a time, a Zoom or a call where we can answer their questions. We're not trying to drip anybody or just, you know, we just want to give you the information and then you have the information to make. make a good decision for your business or not. I love it. Well, Renee, it's been such a pleasure talking with you again. I love your just down-home, real authentic approach. And I know that people appreciate that when they talk with you. So thank you so much for coming on today.

Well, thank you, Mike. It's my pleasure. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, Visit www. www. influential entrepreneurs radio.com.