Large Contributions, Larger Tax Deductions
Defined Benefit plans for high income self-employed individuals, professionals, and small business owners can provide significant current year tax savings. Large, tax-deductible contributions to a personal Defined Benefit (DB) retirement plan can potentially accumulate to as much as $1-3.4 million1 in just 5-10 years.
Defined Benefit plans are approved by the IRS and work best for:
- Independent contractors, consultants, physicians, real estate agents, and sales reps
- Employed individuals who also receive self-employment income from a side business, royalties, residuals
- Owner-only or owner and spouse or family businesses
- Self-employed spouses of high-income earners
An individual’s maximum contribution for a Defined Benefit plan is calculated based on age, income and years in the business.
In general, the older the business owner is, the higher the contribution.
Try our retirement plan calculator and see how much you could contribute to retirement wealth and save in taxes for 2026.
1 In addition to the information contained in the example provided, approximations are based on a 5.5% nominal investment growth rate. Number of years of savings equals retirement age minus current age in whole number of years. This assumes no loans or withdrawals are taken throughout the current age to retirement age.
Compare Retirement Plan Savings Limits
For a Client Age 52 Earning $360,000**
**2026 plan maximum contribution limits for a 52 year-old, including “catch-up” contributions of $4,000 for SIMPLE IRA, $8,000 for 401(k). This information is intended to be educational and is not tailored to the investment needs of any specific investor. Consult an attorney, tax professional, or other advisor regarding your specific situation
Quick Eligibility Check list
- Self-employed, small business owner
- Earning $100,000+/annually
- Age 35+
- Interested in making large annual contributions beyond what is allowed in a SEP or 401(k) for several years
- Looking for tax savings
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