Defined Benefit Plans

Defined benefit pension plans are retirement plans that can offer substantial tax deductible retirement contributions and significant future retirement income to the self employed and small business owners.

Features:
 

• Depending on the age and income of the business owner, annual contributions can exceed $100,000 or more.
• Loans may be permitted, however this may increase annual funding requirements.

Disadvantages:

• More expensive to set up and to maintain.
• Rigid annual funding requirements.

What are the advantages of a Defined Benefit Plan?

The defined benefit plan is appropriate for those age 45 or older who wish to make tax deductible contributions in excess of the maximum limits of the Individual 401k or SEP IRA. Defined benefit plans offer substantial tax deductible retirement contributions and significant future retirement income.  Depending on your age and income the annual contribution to a defined benefit plan can exceed $100,000.

Defined benefit plans have greater administrative fees and more rigid annual funding requirements, but may be ideal for business owners who wish to shelter the largest percentage of their income and/or who want to make the largest retirement plan contribution permitted by IRS rules.

Learn more about Defined Benefit Plans

   Need Help or Advice?  |  Open a Defined Benefit Plan

Disclosures:

*  The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

* Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.