What Are Some Advanced Retirement Plan Options For High-Income Earners?

Posted on February 22, 2022

Are you a high income earner that is looking to take retirement plan a big step further? If so, this may be something you want to look into. I would highly recommend as a high income earner that you schedule a consult with us before making any decisions so we can ensure you have the right tax planning in place to match any plan decisions.

For this we want you to imagine a three tiered wedding cake with the smallest tiers on top and the largest on the bottom and then flip it upside down. These are the different layers you have when you are talking about pre-tax options in a 401k plan.

  • Smallest Option: 401k Plan Itself (EmployEE Contributions) – Up to $19,500
  • Middle Option: Profit Sharing (Employer Match) – Up to $58,000
  • Advanced Option: Cash Balance Plan (Type of defined benefit plan or pension plan) – $300k+ per year pre-tax.

What Is A Cash Balance Plan?

Cash Balance Plans are designed for the highly successful entrepreneur who want, or need, to save a lot more than a traditional 401(k) plan.

  • Work best with solo-preneurs or employers with small teams.
  • Allow you to contribute up to $300k+ pre-tax while saving you over 6-digits in taxes.
  • Basically you are layering a cash balance plan on top of a 401(k) plan & profit sharing.
  • Allows you to also recruit top candidates.
  • Every single plan is different with a fully custom design and flexibility.

If you are looking for professional advice and help in this area, we work directly with Life, Inc Retirement Services. Email us for an introduction or visit this page. 

On the link above you can setup a call to connect with an expert and get started right away. There is also a retirement plan evaluator which will guide you towards the best plan for your business.

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