Defer up to $250,000 in Taxable Income per Year6/5/2019
I am amazed at how many high income business owners I work with who do not
understand the concept of defined benefit plans. Traditional pension and cash balance plans allow for owners and executives to shelter large amounts of
income on an annual basis with plan designs that can maximize their contributions while still being compliant with discrimination rules.
Cash balance plans were formalized and the lump sum based benefit formula
approved through the Pension Protection Act of 2006 and have replaced the
traditional pension popular before the 1990s. These plans have become common with small, professional groups such as doctors and dentists but work for any profession.
The benefit of deferring income today and the ability to control distributions in
retirement can have a major impact on total taxes paid. Smart tax planning starts
with controlling your money and not handing it over to Uncle Sam.