Small Business

Adding a Cash Balance plan to a 401(k) Profit-sharing plan currently in place can allow owners to invest significantly higher contribution limits. 

This illustration is common for what we see for a small business. In this scenario the business has two owners (a husband-and-wife couple) along with four additional employees.  

The owner wanted to make the maximum allowable Cash Balance contribution for her age (68) which results in a total contribution, including the 401(k) profit sharing plan, of $562,861. The Cash balance contribution largely depends on profitability and only a 7.5% of pay contribution for all other employees is required. 

This allows this married couple to save nearly $253,000 in taxes. 

Do you have clients or prospects looking to accelerate retirement savings and reduce their tax burden? To receive a Cash Balance Overview with one of our dedicated FuturePlan Cash Balance experts, fill out this quick form here. 

Retirement Plan Illustration – 2023

Results shown may require plan amendments to the 401(k)/profit sharing plan before the plan year end.

*Assuming a 45% tax rate; taxes are deferred only.

Plan designs are for illustration purposes ONLY. Contribution amounts are subject to change based on final year-end census data. If company is a Corporation, an S-Corporation or an LLC taxed as a corporation, owner(s) compensation listed above must be reported on Form W-2.

All information, materials, calculations, methods, formulas and other content contained herein (collectively, “Content”) are exclusively owned and are the copyrighted property of Ascensus, LLC. No Content may be used, reproduced, transmitted, distributed or otherwise exploited in any way without the express written permission of an authorized representative of Ascensus, LLC.

This sample is for illustrative purposes only.