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A husband-and-wife team running a business with 10 employees sponsored a 401(k)/Profit Sharing Plan. Having invested heavily in growing their company, the owners found themselves with minimal retirement savings and sought a way to catch up while managing staff benefit costs.
Their goals included maximizing retirement savings to catch up, reducing their annual tax liability, and controlling staff retirement plan costs.
After a strategic retirement plan assessment, including detailed plan illustrations, the firm introduced a flexible market-based cash balance plan tailored to their needs. The customized solution allowed the owners to max out their 401(k) contributions and increase profit-sharing amounts for themselves while maintaining staff contributions at 5% of compensation.
This thoughtful redesign empowered the owners to accelerate retirement readiness without compromising their commitment to staff benefits or business growth. Results included:
The owners doubled their annual deferrals
Tax liability reductions of over $25,000 each
Tripling of their retirement plan savings over five years
Whether you want to reward key executives, reduce tax exposure, or boost retention with long-term wealth-building benefits, a cash balance plan can help. Reach out to our team to request your free cash balance illustration today.