Case study
Cash Balance Plans, Owner Only
One owner, no employees
With no eligible employees, a Cash Balance plan stacked on a 401(k) with profit sharing sends every dollar of the contribution to the owner. This is the highest deduction available to a consistently high income earner.
100%
Total contribution to owner
$316,200
Total for owners
$0
Cost for employees
| Role | Age | Service | Compensation | Cash Balance Pay Credit | 401(k) Deferral | Profit Sharing | Total Recommended |
|---|---|---|---|---|---|---|---|
| Victor | 56 | 1 | $345,000 | $265,000 | $30,500 | $20,700 | $316,200 |
| Total for owners | $316,200 | ||||||
| Cost for employees | $0 |
Illustrative design based on the assumptions shown. Your own numbers will differ with age, compensation and employee group.
How this design works
- Cash Balance plans must be set up with the intention of being permanent, generally a three to five year commitment.
- Account balances grow through employer contributions and an annual interest credit set in the plan document.
- Changes in plan demographics may change the contribution requirement in later years.
Would this work for your company?
The right design depends on your census, your budget and what you are trying to accomplish. Send us your headcount and we will model it against your actual numbers.
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