Our signature focus for business owners and private practices, Cash Balance Plans are pension plans that resemble profit sharing plans, but they are unique in the fact they allow for higher contribution limits than a typical 401(k)/profit sharing plan. For the right client, these differences and benefits can equal larger retirement savings and a lower tax liability. We often suggest cash balance plans for high income business owners:

Without a sizable nest egg
Many business owners choose to put their extra funds back into the business instead of building a retirement portfolio, but when retirement looms near, a cash balance plan can “supercharge” your savings by allowing for more contributions.

Looking to save on taxes
We often hear clients say, “I’m paying too much in income taxes. What can I do to stop the bleeding?” A Cash Balance Plan may be just the answer.

All contributions to a cash balance plan are tax-deductible, similar to a traditional 401(k). But because of higher contribution limits, you can defer a greater portion of your tax burden by placing it in a cash balance plan, further limiting your tax liability.

Wanting the security of a pension
The investments inside a cash balance plan are determined by the plan trustees. Additionally, participants are guaranteed a minimum benefit amount similar to a traditional pension.

Cash balance plans are not right for every client, but depending on the situation an owner or professional could make a tax-deductible contribution between $100,000 to $400,000 per year. To determine if a plan is right for you, contact us today.

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Forth Financial Group