ARE YOU MAXING OUT YOUR 401(K) PLAN CONTRIBUTIONS, BUT NEED….

• Additional retirement savings

• Larger deductions to reduce taxable income

Accomplishing these goals by adopting a Cash Balance Plan is a growing trend among professional groups, including lawyers, doctors, dentists, engineers, architects and accountants.

Combining a Cash Balance Plan with a 401(k) profit sharing plan can provide annual pre-tax contributions of $100,000 to $250,000.

WHAT IS A CASH BALANCE PLAN?

Like a 401(k) profit sharing plan, a Cash Balance Plan is an IRS qualified retirement plan providing tax deferral and creditor protection. A Cash Balance Plan document defines annual contributions and earnings to be credited to each participant. Contributions do not have to be equal, therefore business partners/owners can receive between 85 to 95 percent of contributions. Cash Balance Plan investments are pooled and not self-directed. Participants receive statements with their cash balance plan account which can be rolled over as a lump sum into an individual retirement account (IRA) or other employer sponsored plan upon separation from service.

IS A CASH BALANCE PLAN RIGHT FOR YOUR BUSINESS?

There’s a good chance if…

• Partners/owners already contribute the maximum of $55,000 or $61,000 annually to a 401(k) profit sharing plan

• Partners/owners already contribute 3 to 4 percent annually to employees in 401(k) profit sharing plan

• Business income and cash flow is consistent

WHAT DO YOU NEXT?

Contact Jason Underwood, CPA, APM at (423) 870-1800 opt.3 or junderwood@cphpension.com to request a custom Cash Balance Plan illustration to find out if a Cash Balance Plan is right for you and your business.