Cash Balance Plans

Is a Cash Balance Plan right for your company? If it is, you and your employees could save significantly more for retirement.

Sole Proprietors: Click to Learn How Cash Balance Plans Can Benefit You:

Even if your company already offers a 401k Plan or a Profit Sharing Plan, you and your employees can save even more for retirement by adding a Cash Balance Plan. Especially for company owners, a Cash Balance Plan is a great way to save more than a 401k allows.

Currently the maximum annual employee contribution to a 401k Profit Sharing Plan is $66,000 ($73,500 if age 50+). In a CBP the maximum annual savings can exceed $200,000 per year (varies based on age and income).

There are other compelling benefits to a Cash Balance Plan, such as:

  • Tax Deductions: A contribution to a Cash Balance Plan account is a tax deduction that reduces the company’s ordinary income dollar for dollar.
  • Varying Benefits: Based on its plan document, a CBP can provide varying levels of benefits for the owners, management team, and employees. With this flexibility, Cash Balance Plans can be used to reward top performers or meet special needs.
  • Increased Savings: Maximum limits often can be funded in a CBP as well as a 401k Profit Sharing plan.

These are just some of the advantages of a Cash Balance Plan. For a more customized discussion of how a Cash Balance Plan could benefit your company, please call us at (312) 762-5960 or Please email us.

Know The Key Points of Cash Balance Plans Before Deciding on One

If you’re new to Cash Balance Plans (CBPs), use these facts as a starting point to learn more about them. And of course, feel free to contact us to discuss these or any other questions you have about these plans:

  • A Cash Balance Plan is a defined-benefit program in which the employer makes annual contributions and interest credits to individual-employee accounts, based on provisions in the plan document.
  • When a CBP participant terminates employment with the company, he or she is eligible to receive the vested portion of the account balance.
  • Assets in a CBP are protected by the law known as ERISA. If a company declares bankruptcy, the funds in its CBP are protected from creditor claims.