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 increase retirement savings by $1-2.6 million in 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 2021.
