Massive Tax Deductions
$100K–$350K+
Cash balance contributions are fully tax-deductible to the business. For an owner in a 37% federal bracket plus state taxes, a $250,000 contribution can save over $100,000 in taxes in a single year.
Cash Balance Plans for High-Income Owners Who Want to Save More
Shelter $100,000 to $300,000+ per year in tax-deferred retirement savings. We design, administer, and test cash balance plans alongside your existing 401(k) for maximum benefit.
Request a Plan ReviewWhen 401(k) Limits Aren't Enough
Why Cash Balance?
A 401(k) caps total contributions at $70,000 per year (2025). For high-income business owners, that's not enough to make a meaningful dent in their tax liability. A cash balance plan can increase annual tax-deferred contributions to $200,000, $300,000, or more — depending on age and income.
Age-Weighted Contributions
Older = More
Cash balance plan contribution limits increase with age. A 55-year-old can contribute roughly $300,000+ per year. A 45-year-old can contribute approximately $200,000. We model the exact amounts based on your age and income.
Combines with Your 401(k)
Combo Design
Most cash balance plans are designed as combo plans — a 401(k) for employee deferrals and employer match, plus a cash balance plan for the large employer contribution. We design both plans together to maximize the total benefit.
Predictable Benefits
Defined Benefit
Unlike a 401(k) where balances fluctuate with the market, cash balance plans define a hypothetical account balance that grows by a guaranteed crediting rate (typically 5%). Participants know exactly what their benefit will be.
Full-Service Administration
What's Included
Plan Design & Actuarial Work
Custom Modeling
We model contribution allocations, test cross-plan compliance, and design the cash balance formula to hit your target contribution levels. All actuarial work is performed by our enrolled actuaries.
Annual Valuation & Certification
Required Annually
Cash balance plans require an annual actuarial valuation and Schedule SB certification. We prepare both, coordinate with your auditor if required, and file the Form 5500 on time.
Cross-Plan Testing
401(k) + CB
When you run a combo plan, nondiscrimination testing spans both plans. We test them together — 401(a)(4), 410(b) coverage, and gateway tests — to ensure the combined design passes.
PBGC Filings
If Required
Some cash balance plans are subject to PBGC (Pension Benefit Guaranty Corporation) premium requirements. We determine whether your plan qualifies for an exemption and handle filings if not.
Who Benefits Most From a Cash Balance Plan?
Cash balance plans work best for professional practices and owner-operated businesses where the owners are older than most of the staff, income is high and relatively stable, and the goal is to shelter significantly more than $70,000 per year. Common profiles include medical practices, law firms, dental offices, accounting firms, and successful small businesses with a handful of owners in their 50s or 60s.
FAQ
Common Questions
How much can I actually contribute to a cash balance plan?
It depends on your age and compensation. As a rough guide: age 45 can contribute approximately $170,000–$210,000, age 50 roughly $220,000–$270,000, age 55 roughly $280,000–$340,000, and age 60+ can exceed $350,000 in some cases. These figures include 401(k) contributions in a combo design. We provide exact projections during your Plan Design Review.
Do I have to contribute for my employees too?
Employees must receive contributions that pass cross-plan nondiscrimination testing. In practice, this typically means a profit-sharing allocation of 5–7.5% of employee compensation alongside the much larger owner contributions. We design the combo plan to minimize employee cost while maximizing owner benefits.
What if my income varies year to year?
Cash balance contributions can be designed with flexibility. Some designs allow a range of contributions. We also include a 401(k) profit-sharing component that is discretionary. The goal is to give you the maximum deduction in good years without locking you into an unaffordable commitment in lean years.
What's the difference between cash balance and traditional defined benefit?
Both are defined benefit plans under ERISA. The difference is how benefits are expressed. A traditional DB plan defines benefits as a monthly annuity at retirement. A cash balance plan expresses benefits as a hypothetical account balance — which is more intuitive for participants and easier to communicate. The tax benefits and contribution limits are essentially the same.
Want to know how much you could shelter? Book a free Cash Balance modeling session.
45 Minutes
No Obligation
Written Analysis
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