Traditional Defined Benefit

Defined benefit plans provide owners the opportunity to accumulate a substantial retirement benefit

 It is a retirement plan that provides guaranteed retirement benefits to the owners and employees of a company, provided annual premium contributions have been funded.  The plan may be funded with, but not limited to, life insurance and annuity contracts.

​Advantages

• Larger contributions for older participants
• Tax deductions
• Availability of life insurance with tax-deductible premiums

Considerations

• Annual contributions/premiums are required
• Investment experience impact contributions

Sample Max Contribution Comparison Scenario

Scenario: Business owner age 55; No employees; Retirement age 62; Compensation $280,000; First year maximum contribution