| A Cash Balance plan is a type of retirement plan that belongs to the same general class of plans known as "Qualified Plans." A 401(k) is a qualified plan. These plans "qualify" for tax deferral and creditor protection under ERISA.
In a Cash Balance plan each participant has an account. The account grows annually in two ways: first, a contribution and second, an interest credit, which is guaranteed rather than being dependent on the plan's investment performance.
Many owners and partners are looking for larger tax deductions and accelerated retirement savings. Cash Balance plans may be the perfect solution for them. 2006 legislation is encouraging more and more professionals and successful business owners to adopt this type of plan.
Continue to How Does a Plan Work»
|
