In my financial planning practice I work with a good number of business owners who want to make aggressive contributions to their tax deferred retirement accounts. This helps put them on strong footing for retirement, but also provides a generous tax deduction. While the 401k plan is the primary retirement plan most business owners are familiar with, a cash balance plans is one I often recommend in addition. In fact, cash balance plans can actually allow for far greater contributions & tax advantages.
A cash balance plan could be a good fit if you’d like to contribute over $50,000 per year to a tax advantaged retirement plan. They don’t come without their nuances though. This guide will explain how cash balance plans work and whether they might be a good fit for you.