Find a Powerful Solution
Many business owners wish they could have the best of both worlds with their retirement plan, combining the large benefit and tax deduction provided by a defined benefit plan with the flexibility of a defined contribution plan. The solution may be a type of defined benefit plan referred to as a cash balance plan.
A cash balance plan is a hybrid plan that allows greater contributions than a 401 (k) or profit sharing plan while still maintaining the look of a defined contribution plan.
An Attractive Benefit
A cash balance plan can be a centerpiece for attracting and retaining employees, while providing a large contribution for the owner and a sizable tax deduction for the business. Since benefits are expressed as a hypothetical account balance, it’s easier for employees to understand the true value of the benefit being provided. The cash balance plan provides an attractive benefit to owners in a mobile workforce, encouraging stability in a business’s workforce.