What are cash balance plans?
Cash balance plans are a type of defined benefit plan where a company makes contributions on behalf of all participants. They differ in that they offer much higher contribution limits than a 401(k) plan, especially for older participants.
Cash balance plans can be a great fit for business owners looking for ways to reduce their tax burden and save additional funds for retirement. Here are some key benefits of a cash balance plan:
- Cash balance plans allow you to save a lot and get big tax deductions.
- Cash balance plan contribution limits increase with age.
- Plan participants earn a guaranteed benefit (rate of return).
- Cash balance plans are portable.
If you would like to talk more about your retirement planning situation, please reach out to schedule an introductory meeting.
