Chiropractors Take a Crack at a CB Plan
A high-income, small business chiropractor husband and wife, who employ their son and daughter, wanted to be able to retire more on their own terms. Using a Cash Balance retirement plan, the couple was able to put away $200,000 for themselves along with having the ability to fund their elective deferral into the 401(k). This is in addition to a 6% profit-sharing contribution. The tax savings in the Cash Balance plan alone is $62,000 and they will be able to accumulate more than $1 million over the 5-year life of the plan.
Advisor Takes His Own Advice
A 43-year-old financial advisor with $70k in side, self-employment income is able to put away $55k of it into a Defined Benefit plan, after paying his business-partner wife a salary of $20k. This high-contribution retirement plan creates a tax savings of $17k per year. Plus, this advisor will accumulate a total of $520k over the 5 years that he plans to fund the plan – which goes to show that early planning can lead to greater savings.
Executive Trades up His Retirement Plan
A 64-year-old Board of Advisors Director, who previously funded a SEP IRA, decided to up the ante and go for a Defined Benefit plan + 401(k) combo plan. This allowed him to put away $102,000 into the Defined Benefit plan and $29,000 into the 401(k), based on his income of $170k in Schedule C. This contribution is considerably more than the $35,700 that a SEP would have allowed. Moreover, this executive now has the potential to stock away more than $500,000 for retirement over 5 years.
Construction Biz Builds Huge Nest Egg
A husband-and-wife business in California were netting $500,000 a year by providing construction fence products. Then this entrepreneurial couple landed a contract with a leading technology company worth $5 million per year, to build secure fences around the company’s data centers. With the husband’s income at $280,000 and the wife’s income at $150,000, they were able to open and max out their Cash Balance retirement plan. As a result, the two owners were able to contribute a total of $202,000 to the plan, while giving their employees a total of $10k. Based on the plan’s design, the husband and wife will accumulate $2.7 million and $1.8 million respectively.
Flexible Software Leads to Flexible DB Plan
A 39-year-old consultant out of North Carolina leads strategic technology projects for an HR software platform used by many Fortune 500 companies. He previously funded a SEP-IRA until finally maxing out contributions in 2019. Based on his $250,000 Schedule C, he will now contribute $95,000 annually to a Defined Benefit plan – with a total accumulation of over $1.6 million by the end of the plan’s life.
Video Gamer Scores High Tax Savings
A 36-year old eSports star in California had a net income of $560,000
as a professional video gamer. Because of her younger age, she wanted
to set herself up for a more secure retirement. Therefore, she opened
a Defined Benefit retirement plan and will contribute $130,000
annually to the plan. This is still more than double what she would
have been able to contribute to a solo 401(k). What’s more, she will
have a projected accumulation of $2.8 million at her retirement from
her DB plan.
Surgeon Cuts New Career Path
A 69-year-old orthopedic surgeon in Texas enjoyed his job in sport medicine, but wanted to reduce his work schedule. Suitably, he transitioned out of his full-time hospital role as an employee and became a part-time independent contractor. Because he now receives a 1099 as a sole proprietor, he was able to open a Defined Benefit plan. This doctor’s Schedule C income is over $400,000, and he wants to contribute $300,000 to the DB plan + Solo 401(k) – a combo plan design – for the next four years until he fully retires.
From Highly Classified to High Income
A 56-year-old former federal government official switched his classification by becoming a consultant for the intelligence agency. The consultant made $1.5 million in 1099 income and wanted to save on taxes and build his retirement. He opened a Defined Benefit and 401(k) combo plan, putting $229,800 into the DB plan and $41,800 into the 401(k). His projected accumulation will be $1,636,000 and he will save $85,000 on taxes this year.
Being on the Right Side of the Fence
Our clients’ fence installation business is about setting boundaries, but these Florida-based contractors have pushed the bounds of their retirement planning. They want to save and defer taxes on as much of their S-corp income as possible. Based on a combined W-2 income of $72,000, this married couple in their 50s is able to contribute $125,000 a year into a Defined Benefit plan. Their estimated tax savings for 2019 will be over $47,000. Plus if they keep their Defined Benefit plan for 5 years, then they will accumulate $965,000.
Not Her First Real Estate Rodeo
A 63-year-old executive at a real estate management company has a side income of $160,000 from managing a portfolio of condos in California. We designed a 2019 retirement program which will allow her to contribute $95,300 to a Defined Benefit plan. In addition, she can put away $25,000 as an employee deferral as well as a $3,076 employer contribution into a one person 401(k). If she keeps her plan for 5 years, she will accumulate over $483,400 in the DB plan alone.
Beekeeper Takes the Sting Out of Taxes
One of our clients, age 71, gave up his job as a software consultant in California to pursue his hobby as a beekeeper, specializing in pollination services. His net schedule C income in 2018 was over $350,000, and he maxed out his SEP contribution last year at $55,000. Based his advisor’s advice, this entrepreneur will now contribute $145,000 each year to a Defined Benefit plan, which will reduce his tax liabilities. That is almost 3x the amount what a SEP could do for him.
From CEO to B of D
A 57-year-old former CEO, based in Florida, serves as a director on various boards. He has an income of $265,000 reported in his sole proprietorship. He opened a Defined Benefit plan and will be contributing an estimated $240,000 annually. We designed a 5-year plan that will accumulate to over $1.3 million. When the plan is terminated the assets will be rolled into an IRA, allowing him to continue tax deferral on these assets and eventually pay taxes more on his terms.
Vacation Rentals Lead to Relaxing Retirement
A successful executive with a Wall Street investment company has side income from buying, renovating, and renting vacation properties on the East Coast. This business generates more than $200,000 per year of additional income. He will install a Defined Benefit plan and Solo 401(k) in order to reduce his current tax liability. His side business will contribute well over $125,000 in 2019. If he contributes at the same level for 18 years, his projected accumulation at retirement will be $1.2 million.
Big Benefits in Being Your Own Boss
A successful sales employee at a medical equipment company decided to go independent so that he could hold on to more of his high income. He expects to net over $500,000 in his new S corporation and will pay
himself $280,000 in W-2. His company will contribute $175,000 to a Defined Benefit plan and with his salary deferrals, he’ll fund another $41,800 in a One Person 401(k). His total deductible retirement contribution for 2019: $216,800.
Like an Annuity for Advisors
An independent advisor in Texas specializes in working with physicians. He just opened his 8th Defined Benefit plan with Dedicated DB, in addition to one he has for himself. The physician will contribute over $100,000 to his plan each year, increasing the contributions into DB plans annually for this advisor to over $1.2 Million.
A California woman, age 62, has a specialty PR firm and is the only employee. Her S corp. will net $200,000 this year but she only pays herself $60,000 in W-2 income. By putting $40,000 a year into her Defined Benefit plan she potentially will qualify for the 20% Section 199A deduction.
Do What You Know
Executive search firms are thriving in this hot job market, particularly if they specialize. We set up a Defined Benefit and a 401(k) plan for a former broker couple who recruit financial advisors for their former firm. Based on W-2 compensation of $275,000 each from their S-corp., this married couple who are in their 60s is able to contribute and deduct $520,000 a year.
Never Too Early, or Too Late
It’s early January and business owners who don’t want to miss out on 2019 tax savings are already opening Cash Balance plans. It’s also never too late in life: one of our first CB plans is for a 74 year old internist about to sell his patient list but keep his C-corporation going by consulting for the next three years. He’ll use retained earnings to fund an OwnersPlus™ Cash Balance + Safe Harbor 401(k) at $380,000 per year for himself, his wife, and one employee with 97% of the benefit for the owners.
Contract CFO Cashes In
A contract CFO in Silicon Valley works for two to three start-ups at a time. His usual cash fee is $100,000 per company per year but sometimes, he receives stock options as part of the deal. This year he cashed out options lifting his income to over $1,000,000. We designed a Defined Benefit plan that will allow him to contribute and deduct $200,000 in 2018. In the future, if he wants to lower his annual contribution, we can re-design his plan.
Dental Practice Fills Retirement Hole
An advisor in Houston brought us a dental practice, an S corporation with an owner, age 58 paying himself $220,000 in W-2 income. He has three employees, two are in their twenties but one is over 65 years old. When the owner is younger than an employee, often the cost of contributions for employees makes the plan unaffordable. In this case, because the employee earns only $22,500, when we added a Safe Harbor 401(k) to a Cash Balance plan, the owner’s share of the contribution, at $268,830, is 98%. Total cost for employee contributions is only $5,916.
Blowing Out all the Stops
An independent lawyer, age 60, who specializes in Whistleblower-Qui Tam issues has high income most years and exceedingly high income when cases are won. We designed a 2018 retirement program which will allow him to contribute $222,000 to a Defined Benefit plan (DB) and up to $40,000 to a one person 401(k). All of his contributions are deductible. If he keeps his plan for 5 years, he will accumulate $1.2 Million in the DB plan alone.
Woman on Board
The push to add women to Corporate Boards is bearing fruit for clients, as well as for the corporations they serve. One such woman was introduced to us by an advisor and CPA at HD Vest. She runs a consultancy, teaches, and gives speeches. She also sits on multiple boards, each of which pays her sizable fees. She and her husband have a combined business income exceeding $2 million. We’ve just designed a defined benefit plan that will allow them to contribute $519,000 annually, beginning in 2018.
How Old Is Too Young?
A Podiatrist, age 36 is earning $800,000 annually. Although he will not be able to contribute as much as someone in their 50’s, by combining a defined benefit contribution of $92,900 and a OnePerson(k) contribution of $34,700, we were able to raise his total annual contribution to $127,600 and save him an estimated $47,200 in tax liability.
Doubting Thomas Sold!
An independent software designer age 47, called with lots of questions, misconceptions and doubts about defined benefit plans. Do you have to annuitize at retirement? No, you will role assets into an IRA where they continue to grow tax-deferred. Are you locked in to the same contribution each year? No, there is considerable flexibility. Can I include my spouse if she does the billing? Yes, if she is receiving W-2 income. After a series of phone calls, he was convinced. We designed a defined benefit plan for their S-corp. with a total contribution of $262,000, coordinating it with their existing solo 401(k).
Is there a Doctor in the House?
As our country looks for cost-effective healthcare solutions, telephone consultations with doctors are growing in popularity. TelaDoc, one of the largest startups offering these services, contracts with several thousand independent medical practitioners who work from their home offices. Last month, an Ameriprise advisor introduced us to a doctor in Missouri, age 43, who set up an S-corp. for his telephone practice and pays himself $140,000 in W-2. We designed a Defined Benefit plan for this physician to which he will contribute $135,000 each year, 100% tax-deductible!
Retirees Just Won’t Quit
At what age do clients retire? For some successful clients, retiring in their 60’s means the freedom to start their own company. Recently, we were approached by a Financial Advisor who was working with a newly retired client who decided to turn years of experience into a consulting business. He and a colleague who also had just retired, signed a 5-year contract with their former employer to consult on international projects to build manufacturing plants. They each have enough in pensions and other savings to support their current cash flow needs. They will each earn ~ $125,000, most of which will be used to fund a cash balance plan. Working closely with their CPAs and Advisors, we designed a plan that will shelter about 75% of their earnings. Large contributions = large deductions for at least the next five years!
Financial Advisor Saves Now
An investment advisor, age 54, who operates his own one-man practice in Georgia wants to engage with more high income business owners. He researched defined benefit plans for a client last year, liked what he saw so much, he decided to open one for himself this January. His high income allows him to comfortably contribute at least $100,000. If he has a great year, we can adjust the contribution.
Franchise Business Broker
Some consultants really know businesses! Our client, age 49, has been consulting to prospective franchise owners for 10 years and earns high commissions when a franchise is contracted. He wants to save and defer taxes on as much of his newly formed S-corp. income as possible. He pays himself $130,000 in W-2 which is enough to allow a contribution of $167,000 to a Defined Benefit plan and another $25,000 to a 401(k) plan. His estimated tax savings for 2017 will be $73,000.
The family that works together, can get wealthy together. Our client found us on the Internet about a year ago. They were having great success in an electrical engineering company and then sold rights to a patent with annual royalties that would supplement the business income for the next several years. The husband age 77, wife, age 75 and three children in their 40’s are all owners and the only employees in the company. We designed an OwnersPlus™ Retirement Program which combines a Cash Balance Plan with a Safe Harbor 401(k) which will allow them to contribute over $800,000 each year and defer more than $300,000 in taxes.
Neurologist Uses His Head
A neurologist, based in Texas, who consults on brain injuries, has a net profit of $500,000 from his sole proprietorship. He opened a OnePersonPlus® Defined Benefit Plan and will be contributing an estimated $200,000 each year for the next five years. Because he is age 70, we designed the plan with a 3-year cliff vesting schedule to postpone RMDs. When the plan is terminated, assets will be rolled into an IRA.
Multiple Income Sources
These days, it’s not only low-income people who have more than one source of income. One recent client, age 57, is a content creator. He is an author with royalties from a well-selling book, a paid TV commentator, he organizes conferences and publishes across many online and offline channels. As a sole proprietor, he will gross about $300,000 this year and wants to save as much as he can. His Defined Benefit plan will allow him to contribute about $150,000 each year, all of which is deductible, significantly lowering his AGI.
Software Engineer Proves the Concept
An engineering company, in business since 2014, has an owner age 39, and 4 employees ages 24 to 45. The company already has a Safe Harbor 401(k) Profit Sharing plan. We just designed a Cash Balance (CB) solution that combines with the 401(k) to allow the owner to contribute and deduct much more each year. The owner pays himself $224,000. He will contribute a total of $139,617 for himself and only $15,900 for the employees so he will receive 90% of the benefit.
Accounting for Growth
A CPA, age 64, has been upgrading the retirement plan for his sole proprietorship as his accounting practice continues to grow. In 2012, when he outgrew his SEP, he opened a OnePersonPlus® Defined Benefit (DB) plan with us, contributing about $60,000 annually. At the time, he only had seasonal employees who worked for him fewer than 1000 hours a year. This year, after he increased several employees to full time, we worked with him to convert his DB plan to a Cash Balance Plan (CB) + Safe Harbor 401(k)/ Profit Sharing Program. Now he will contribute more for himself – $92,500 each year and $17, 340 for his two fulltime employees – all of which is tax-deductible for the business owner. If employees leave before the end of the three-year cliff vesting period, CB contributions revert to the company.
Urgent Tax Need for ER Doc
An emergency room doctor in South Carolina who started her own S-corp several years ago is married to a senior-level engineer whose high compensation provides for all their cash flow needs. The doctor, age 47, wants to save as much of her income as possible. Her W-2 income has averaged $185,000 over the past 3 years and she expects to take the same amount in 2017. We designed her defined benefit plan with an annual contribution of $152,500 which will reduce her tax liability by $70,000 each year, assuming a combined federal and state income tax rate of 38%. At age 62, if she sticks with the plan, she will have accumulated $2.4 Million which can be rolled into an IRA.
Virtual Sales Star Saves Real Money
Young entrepreneurs are earning high income with YouTube self-promotion and sales online. One of our recent clients, age 41, creates online videos in which he promotes his own brand of products as well as offering product placement and reviews for sponsors. His S-corporation income is over $650,000 a year but in the past, he kept his W-2 low – about $40,000 – to minimize payroll taxes and took the rest in K-1 distributions. However, on the advice of his CPA and advisor, he will up his annual W-2 to at least $270,000 so that he can use that compensation as the basis for a retirement plan. He will now contribute over $100,000 each year to a defined benefit plan which is deductible from current year taxes. If he sticks with the plan, he will accumulate $2.6 million toward his retirement.
Anesthesiologist Triples Retirement Savings
An anesthesiologist, age 59, who was working as part of a group of 15 other anesthesiologists at a medical center in California, decided to become an independent physician in 2016 for one reason: to make up for lost time in saving for retirement. Under the company’s 401(k), she was limited to $59,000 in retirement plan savings last year no matter how much she earned. For 2017, as an independent, the physician, opened a defined benefit plan and will contribute $208,300 annually for five years. Her estimated annual tax savings will be $79,000, assuming a 38% combined federal and state tax rate. In five years, she will accumulate $1.4 million in her defined benefit plan. When she retires, the doctor will roll the assets into an IRA where they will continue to grow tax-deferred until withdrawn.
Americans spent more than $12 billion on cosmetic procedures in 2013 according to the American Society for Aesthetic Plastic Surgery. So, it’s no wonder that the owners of clinics performing such procedures are making sizable incomes and are looking for new tax deductions. An RIA in Texas offered just such a solution to a married couple who own a spa that is thriving. In past years, they paid themselves very low W-2 income from their S-Corp, only $75,000 total, but had over $500,000 in K-1 distributions. As a result, though they are in their mid-fifties, they have no retirement savings. For 2017, by bumping up their combined W-2 to $175,000, they will contribute $150,000 to a combined Cash Balance + Safe Harbor 401(k) Profit Sharing retirement program for themselves, and only $18,200 total for their 5 employees. How beautiful is that?
Let us run an illustration for someone you know.
Raise the Roof!
It’s time to celebrate! A roofer, age 61, in Texas has a thriving C-Corporation in which his only other employee is his wife; all his other workers are independent subcontractors. We designed a combined OnePersonPlus® Defined Benefit and a OnePerson(k) program to allow them to contribute $435,000 toward their retirement for the next 5 years until he retires. As planned, this program will allow them to defer $165,000 in taxes annually and accumulate over $3.5 Million in the DB plan alone. Fortunately for all, their advisor knew them well enough to get it done in time as their fiscal year ends July 31st. Are there any roofers in your community?
Timing is Everything
The private owner of a short-term lending company is paying himself $250,000 and wants to save as much of that amount as possible. He has three employees and his business is growing rapidly so he’s likely to add staff over the next few years but, like the money he lends, employees tend to turn over frequently. If he maximized contributions for himself, he wondered, how much he would have to contribute for the employees? We discussed the owner’s business expansion plans and came up with a solution. Using our OwnersPlus™ Retirement Program, we paired a Safe Harbor 401(k) Profit Sharing plan with a Cash Balance plan. The designed Program allocates 93% of the contribution for the owner – over $245,000, for an estimated tax savings of over $100,000 each year. The Cash Balance plan has a one-year eligibility requirement and a three-year vesting schedule; new employees will not qualify to participate in the plan for a year, and employees who leave in under three years, will not be vested. As we say, “It’s all in the timing!”
Teaching Us a Retirement Lesson
A high school teacher had been developing excellent curricula for over 15 years. And then along came the Internet! By selling her attractive teaching guides and other materials online, this smart teacher is earning over $300,000 as side income in addition to her teaching salary each year. What started as a hobby is now a thriving business. We designed a defined benefit plan which will allow her to contribute almost $150,000 toward her own retirement on top of what she is currently saving in her school 457 plan. The entire contribution is a deductible expense, lowering her projected tax bill by $55,000 for 2017.
Missed the Boat in 2016?
Todd I., age 52 and a Financial Advisor in Virginia had a good earnings year in 2016 but had already contributed to his existing Solo 401(k) when he learned about our OnePersonPlus® Defined Benefit plan (DB). Although he had earned over $400k, he had maxed out his contribution at $59,000. In January, he came back and said, “I’m ready! Let’s get the DB going.” We opened it right away so that he could start making his contributions for 2017. He will be contributing $125,600 to the DB and another $40,200 to the solo 401(k) for a total contribution of $165,800 – almost 3 times what he could contribute to the 401(k) alone — and he estimated his current year tax savings would be approximately $64,000.
Not All is Dire in the Funeral Business
If you were a fan of HBO’s “Six Feet Under”, you know that funeral homes often are small businesses involving family members and/or a few other employees. These businesses can be making considerable income. Recently we helped a financial advisor in Indiana open a Cash Balance Plan for a funeral home. The business is owned by a couple in their early 50’s who have two employees in their 40’s. The company already had a Safe Harbor 401(k) and the couple wanted to start contributing more toward their own retirement but didn’t know that other options were available to them. Although we ran several scenarios in which the owners, Mr. & Mrs. A., could contribute as much as $200,000, they were more comfortable starting with a smaller commitment in 2016 with the intention of increasing it for 2017. By contributing less than $1500 for each of their employees to the Safe Harbor 401(k)/Profit Sharing plan, the owners can still contribute $60,000 to a Cash Balance Plan for themselves, make salary deferrals of $42,000, and receive profit sharing of $2000 bringing the business’s total 2016 contribution to $107,000 of which 97% is for the owners. Because the plans were designed with growth in mind, Mr. & Mrs. A. can increase the $60,000 contribution up to ~$125,000 in 2017 without amending the plan.
Hair Raising Savings for Surgeon
A Registered Investment Advisor in the southeast is working with a hair transplant surgeon, Dr. V., age 55, who has four employees ranging in age from 25 to 49. The doctor has an S-Corporation and pays himself $265,000 in W-2 (which is the maximum compensation that we include in calculating his contribution in 2016). His four employees earn total compensation of $245,000. The doctor will contribute $143,000 to a Cash Balance Plan for himself and only $5,400 in total for the employees. In addition, Dr. V. can defer $24,000 into a Safe Harbor 401(k) for himself, and make profit sharing contributions of $12,250 total for the employees and another $18,250 for himself. In total, he will be adding $185,000 to his own retirement each year and deferring an estimated $77,000 in taxes.
Chef Puts It All Together
A celebrity chef and cookbook author in his mid-40s makes over $1.5 million from royalties and endorsements. He has no full-time employees so the full benefit of his plan will go to him. Even though he’s young, he’ll be able to contribute $113,000 annually to a combined defined benefit plan and a one person 401(k). The contribution is a deductible business expense which will reduce his tax liability by about $43,000 for 2016.
Tax Attorneys Get Big Returns
A married couple in their early 60’s has built up a successful tax law practice. They plan to work at least another 5 years and want to use the intervening years to maximize their retirement savings. In 2016, they increased their W-2 to pay themselves $265,000 and $235,000. Although they have 3 employees, ranging in age from 29 to 46, we were able to design a combined Cash Balance and Safe Harbor 401(k) program that provides 99% of the contribution for the owners. Each year, if their business situation remains the same, they will be able to put $460,000 toward their own retirement and just $5,700 total for their employees. They know tax law — we estimate they will save themselves $176,000 in current year tax liabilities.
Astronaut Has Astronomical Savings
Retired astronaut began new career at age 52 as public speaker and writer. Though he’s come down to earth, his new Defined Benefit + 401(k) retirement program is just taking off. In 2016, he’ll start to contribute $179, 400 in the DB and another $39,900 to a OnePerson(k). Over the next 10 years, if he sticks with his plan, he will accumulate $2.5 Million in the DB plan alone.
Acupuncturist Stimulates Tax Savings
The wife of a corporate executive earns over $100,000 a year as an acupuncturist working out of their home. They don’t need her income at this time. Because she is 60 years old, she is able to put 100% of her earnings into a Defined Benefit plan for the next five years. Estimated tax deferrals: $38,000 a year.
Guiding big container ships into ports can be lucrative. Mr. B., age 66, has an S-corporation and pays himself about $300,000 a year. He has no employees. Because of his age and income, with a combo OnePersonPlus DB plan and a OnePerson (k), he’ll be able to make tax-deductible contributions of $251,000 to the DB and $37,000 to the “k” for 2016. After five years, he will accumulate $1.5 million in the DB plan alone.
Professor's New Gig
Former Economics Professor, age 71, is now consulting and helping a financial advisor build his business. He expects to make $125,000 this year from the consulting, on top of his pension and doesn’t need the consulting income for the near term. We opened a defined benefit plan for him with an annual contribution $100,000 which he expects to be able to fund for five years. The plan was set up with a three-year vesting schedule so that he doesn’t have to take Required Minimum Distributions (RMD) for the first three years.
When the whole family works together, huge contributions are possible. This S-corporation consists of a married couple in their mid-fifties who pay themselves $220,000 and $210,000 in W-2, their two young adult children, who each earn $45,000 and no other employees. We designed a defined benefit and 401(k) solution that allows the business to make tax-deductible contributions exceeding $500,000 for the four of them each year, the majority for the parents. When the parents gradually turn the business over to their children, they will have already put away enough to secure their own retirement.
Advisor Takes Advice
Before he would recommend a defined benefit plan to his clients, a Michigan-based advisor decided to try one for his own sole proprietorship. On earned income approaching $500,000, he decided to contribute $120,000 a year to a plan. Now he’s ready to introduce the plan to two high income clients who are good prospects for a defined benefit plan.
Ophthalmologist Sees His Way
Dr. C, age 58, and his wife have a thriving practice with three additional employees. We designed an OwnersPlus Cash Balance + 401(k) program that he will contribute to until he retires, in about five years. The practice will contribute almost $300,000 a year of which 98% will be on behalf of Dr. C and his wife. This should save the couple over $100,000 in current year taxes each year. Upon retirement or plan termination, the couple’s assets will roll into an IRA and continue to grow tax deferred until withdrawn.
Developer Doubles Down
Developer in Northern California has had an S-corp. for the past three years, with steadily rising income. He’s been able to contribute as much as $53,000 in a SEP for the past few years and wants to save much more going forward. This year, he’ll pay himself $265,000 in W-2 and contribute $83,400 to a OnePersonPlus DB and $33, 900 to a OnePerson (k). Next year, if his income declines due to fluctuations in the market he will reduce the amount he contributes to the 401(k) or not fund it at all.