Cash Balance Plan

What is a Cash Balance Plan?

A Cash Balance Plan is an IRS-qualified Defined Benefit retirement plan that can help business owners realize tax deductions and savings rate up to 4x greater than a 401(k) plan alone.*

*Assumes annual 401(k) maximum contribution of $20,500; $6,500 catch up (over age 50); $40,500 profit sharing (over age 50 for 2022)

How does a 401(k) Cash Balance Plan work?

A Cash Balance Plan is used in combination with a 401(k) Profit Sharing Plan in order to maximize retirement savings and tax deductions for business owners. Unlike a 401(k) plan, all assets within the Cash Balance Plan come from the employer, assets are pooled and investments are employer-directed and employer-guaranteed.

Why does a Cash Balance plan matter?

For many successful business owners, the contribution limits of a 401(k) alone may not be enough to achieve retirement savings goals. Adding a Cash Balance Plan can help. Employees benefit too with a guaranteed company contribution to their retirement account.

If you're relying on your 401(k) alone, you could be missing out on larger tax deductions and accelerated retirement savings. Depending on your age and retirement goals, you could save as much as $147,260 on your taxes every year* with an IRS-qualified Cash Balance Plan for businesses.