3 Ways Advisors Got it Wrong in 2018

8th Feb 2019

3 Top Misconceptions

2018 was another strong year for our IRS-approved Defined Benefit and Cash Balance plans. We worked with hundreds of advisors to open plans for high income self-employed individuals and small business owners seeking tax reduction strategies—most of whom have never opened these plans before. Along the way, we also encountered several myths we want to clear up for you. Here are the top three:

misconception 1

Some advisors believe defined benefit plans fix the contribution timeframe and dollar amount from day one. What they don’t realize:

  • Each year, we calculate a contribution range based on income, accumulated assets and other factors. A well-designed plan builds in flexibility.
  • If a client’s situation changes, so can their tailored plans.
  • While these plans shouldn’t be used for a one-year windfall, many are active for 3 to 5 years. 

Quick Links:

Get our New Flexibility in Defined Benefit Plans white paper.
Call us to see if your client qualifies: 866-269-2706

misconception 2

While the Tax Cuts and Jobs Act (TCJA) lowered tax rates for C corps, owners of S corps, partnerships and sole proprietorships might still need high-contribution retirement plans. That’s because:

  • Outsized Defined Benefit and Cash Balance plan deductions may qualify owners of pass-through entities to take the Section 199A 20% deduction by reducing taxable income below the $160,700 threshold ($321,400 if married filing jointly) for 2019.
  • As clients see their 2018 tax returns and high tax liability, it’s a great time to start the conversation about the potential benefits of Defined Benefit and Cash Balance plans for 2019.

Quick Links:

Learn the basics: Sign up for our weekly demo.
Get our white paper to see how increasing retirement contributions can offer a triple compound benefit.
See our infographic on tax deductions impacted by the TCJA.

misconception 3

You don’t have to be a retirement plan expert. But if you’re looking for the best solutions for clients, you can count on our expertise:

  • Dedicated Defined Benefit Services specializes in Defined Benefit and Cash Balance retirement plans.
  • We have established 4500+ high-contribution plans for 1-10 person companies. 
  • Our plan design consultants can explain these plans and are happy to run custom proposals. 

Quick Links:

Call us today at 866-269-2706 about your prospecting strategy and how we can work together to qualify your clients.
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