Large Law Firm
One of Los Angeles’ largest law firms needed to provide a program for additional tax-deferral for the dozens of partners. The 401(k) Profit Sharing contributions maxed out around $50,000 and were just not enough.
Kravitz designed a Cash Balance plan that will allow the firm to contribute approximately $9,500,000 into the plan, with many of the partners receiving their age-weighted maximum every year. The firm is also delighted to continue to offer excellent benefits for employees.
Retirement Plan Illustration
Year Ending December 31, 2020
Partners 50 or above
|
401(k) | Profit Sharing | Cash Balance | Total |
1 | $26,000 | $37,500 | $218,000 | $281,500 |
2 | $26,000 | $37,500 | $170,000 | $233,500 |
: | : | : | : | : |
43 | $26,000 | $37,500 | $139,000 | $202,500 |
Subtotal | $1,638,000 | $2,362,500 | $7,510,000 | $11,510,500 |
Partners under 50
|
401(k) | Profit Sharing | Cash Balance | Total |
1 | $19,500 | $37,500 | $126,000 | $183,000 |
2 | $19,500 | $37,500 | $103,000 | $160,000 |
: | : | : | : | : |
47 | $19,500 | $37,500 | $77,000 | $134,000 |
Subtotal | $1,033,500 | $1,987,500 | $4,351,000 | $7,372,000 |
Partners Total
|
$2,671,500 | $4,350,000 | $11,861,000 | $18,882,500 |
143 Associates | n/a* | $0 | $0 | $0 |
247 Other Employees | n/a* | $926,250 | $0 | $926,250 |
Total | $2,671,500 | $5,276,250 | $11,861,000 | $19,808,750 |
Percent to Partners: 94%
*This illustration shows only the cost to the firm.
Staff employees and associate attorneys pay for their own 401(k) contributions.