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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.

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