What is a Cash Balance plan?

• A Cash Balance plan is a type of retirement plan that allows business owners to contribute in many cases over $200,000 per year. Contribution limits are based on the age of the owner.  
• The plan is entirely employer-funded and the contribution/benefit formula for participants is clearly defined by the plan.
• A Cash Balance Plan takes advantage of a business expense that an owner can keep, deduct from profits, and let grow tax-deferred.  Owners can fund a sizable portion of retirement savings using money they would have paid in taxes.

Who are Cash Balance Plans best suited for?

• Companies who expect to consistently show a profit in the next 3-5 years.
• Business owners looking to reduce their tax burden.
• An average age spread of around 10 years between the group of employees (owners and officers) and everyone else.
• Companies currently utilizing a safe harbor 401(k).
• Willing to provide a 8-10% of pay  benefit to their employees.

Maximum Individual Funding (Updated February 2022)