Large Contributions, Larger Tax Deductions
Defined Benefit plans for high income self-employed individuals, professionals, and small business owners can provide dramatic 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 pension 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 pension plan is calculated based on age, income and years in the business.
In general, the older the business owner is, the higher the contribution.
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.
Ideal Candidates for Defined Benefit plans
Client 1
Self-employed, age 50+, consultant earning $100,000+/annually looking to maximize retirement savings
Client 2
Medical professional, age 40+, interested in lowering their tax liability and saving for retirement.
Client 3
A full-time employee with side-income over $100,000, looking to retire in
5-10 years.
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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