CASH BALANCE WHITE PAPER FOR YOU AND CLIENTS
A Cash Balance plan for small businesses looking for tax savings
OwnersPlusTM is a retirement program for partnerships, professionals, and business owners with 2-10 employees. By combining a Cash Balance Defined Benefit plan and a Safe Harbor 401(k)/Profit Sharing plan, OwnersPlus gives business owners the potential to make very large deductible contributions for themselves — often $150,000 or more annually — while limiting the total cost of benefits for employees.
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Request an Estimate
Download our illustration request form and we’ll create a customized illustration at no charge or call us at 866-269-2706.
Quick Eligibility Checklist for OwnersPlus Cash Balance Plan + 401(k) Retirement Program
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For a 60-year-old business owner earning $350,000 in W-2 income
2023 plan maximum contribution for a 60-year-old, including “catch-up” contributions of $7,500 for 401(k)
Cash Balance plans aren’t right for everyone. OwnersPlus works well for business owners who are:
- Owners of profitable businesses with 2-10 employees, professionals with small practices, or partnerships
- Age 35+
- Interested in making larger contributions than allowed in SEP-IRA or 401(k)
- Likely to have cash flow to make contributions for 5+ years
- Willing to make limited contributions for employees
Key Advantages of OwnersPlus Cash Balance + 401(k) Plans
- Owners potentially can contribute three or four times what they can to other plans
- Contributions are deductible business expenses generally saving the owner tens of thousands of dollars in annual taxes
- Partners can receive different contribution amounts
- Owner can set different “classes” and contribution levels for employee groups which provides for more flexibility in allocating employee benefits
- Contributions on behalf of employees are limited and established during plan design. However, changes in personnel will impact required contributions.
- Investments grow tax deferred, building wealth faster
- At retirement (or at plan termination), assets in both the Cash Balance and the 401(k) plans are rolled into IRAs and continue to grow tax-deferred until withdrawn
- Clients and their advisors can choose any equities, mutual funds, bonds, annuities or other marketable securities to fund their plans
- Turnkey administration by specialists who design plans tailored to meet each business owner’s objectives and handle all paperwork related to plan set-up and ongoing government compliance and reporting.
Businesses That Might Qualify
Getting Started with OwnersPlus Cash Balance + 401(k) Retirement Program
Please note these plans should be opened by December 31 and at the latest by the business’ tax filing deadline including extensions for the plan year.
1
Request illustration Complete form or call 866-269-2706
2
Review and refine Illustration with Dedicated DB specialist
3
Business owner accepts plan design
4
Plan documents prepared and signed
5
Open investment accounts
Key Dates
Cash Balance plans should be opened by December 31 and at the latest by the business’ tax filing deadline including extensions for the plan year. Cash Balance contributions are not required until the tax filing deadline with extensions but no later than eight and a half months after the end of the fiscal year.
Safe Harbor 401(k)/Profit Sharing plans must be set up before October 1. The 401(k) deferral on behalf of business owners will be limited to 5% if this deadline is missed.