Cash Balance Guide
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Cash Balance Plan
The powerful tax strategy for business owners.
How a Cash Balance Plan Works
There’s a huge tax benefit that likely no one has told you about. By maximizing your savings and tapping into additional plan features that multiply your tax benefits, you can save up to $100k or more on your tax bill. See why many successful business owners have added a Cash Balance Plan to their company’s 401(k) program.
What is a Cash Balance Plan
A Cash Balance Plan is a type of retirement plan that allows business owners to contribute up to $480,500 per year. It’s sometimes called a Cash Balance pension plan because it’s a defined benefit plan, meaning contributors are guaranteed a specified amount in retirement.
Why it’s Important
A Cash Balance Plan allows owners to keep more of their profits and grow them tax-deferred. And because it’s a business expense, a Cash Balance Plan can significantly reduce a company’s business taxes. In fact, owners can fund a sizable portion of retirement savings using money they would have paid in taxes.
How Fisher Can Help
Cash Balance retirement plans can be complex and require a plan advisor with deep expertise. Fisher is one of America’s top advisory firms with experience helping many business owners set up and manage this sophisticated strategy.
Must-See 2-Minute Video
Cash Balance 101 for Business Owners
Are you missing out on tax advantaged savings? Many business owners don’t yet know about the massive tax benefits a Cash Balance retirement plan can offer. Watch this short video from a Fisher small business specialist to learn how a Cash Balance program may help you.
| Visual | Audio |
|---|---|
| [Upbeat music] | What is a Cash Balance Plan Fisher Investments® 401(k) Solutions |
| [The volume of the music is reduced] Male Voice: Hi, I’m Mathew Cooksey, I’m the business development team lead here at Fisher Investments 401(k) Solutions. And I work with a lot of high-earning business owners who didn’t realize we have a strategy to help them significantly reduce their tax liability upwards of one hundred thousand dollars each year. You could be one of them. | A man dressed in a suit speaks to the camera. A flyout in the lower left corner identifies him as Matthew Cooksey, Business Development Team Leader. |
| So, a Cash Balance plan is a type of retirement plan that often works side-by-side with a 401(k) plan that allows high-earning business owners the ability to significantly increase their tax deferred savings often upwards of three hundred thousand dollars each year while also reducing their tax liability in some cases upwards of one hundred thousand dollars each year. And the greatest part about that is those contributions also grow tax deferred. | The camera zooms in as the man continues to speak. |
| A Cash Balance Plan can be one of the most valuable tools that a lot of high earning small business owners overlook in their strategy to reduce their taxes. A lot of the client I talk to have exhausted a lot of the traditional models or ways that they can reduce the amount they are paying in taxes. With this plan it allows them to not only save hundreds of thousands of dollars each year into their personal retirement those contributions allow them to reduce their tax liability as well. And that can be really beneficial for people that have kind of hit the wall of what is available to them. | The camera zooms back out. |
| Cash Balance plans can be complex. And its important to have an advisor who is an expert in them to help you navigate them. Here are Fisher investments we have the expertise and the experience to help our clients and their CPAs optimize their plans to not only reduce their tax liability on an on-going basis, but make sure their getting the most out of their retirement savings. | The camera zooms back in. |
| The volume of the upbeat music increases. | Fisher Investments 401(k) Solutions. © 2021 Fisher Investments. Investing in securities involves the risk of loss. Intended for use by employers and their consultants, considering or sponsoring retirement. |
| Music fades out. | Screen fades to black. |
How Much Can You Save with a Cash Balance Plan?
Tax savings from your Cash Balance Plan could fund a sizable portion of your retirement savings. Download this helpful infographic to see the numbers for yourself and access additional tools and resources.
Cash Balance Case Study
Interested in seeing how a Cash Balance Plan might work in real life? Check out how a high-earning doctor, who’s both a business owner and employer, can use this IRS-sanctioned strategy to reduce her tax bill by more than $100k a year.
- Compare an ordinary tax-deferred plan with a 401(k) + Cash Balance Plan.
- Learn more about the rules governing Cash Balance plans.
- See how savings increases lead to tax decreases.
Cash Balance Guide
Looking to dig into the details of Cash Balance plans? What you need to know to unlock huge savings is right here, from the benefits of this type of plan to the challenges of building and maintaining a Cash Balance Plan over time.
Download our guide to get answers to these questions and more:
- What is a Cash Balance Plan?
- What are the benefits of a Cash Balance Plan?
- How does a Cash Balance Plan work?
- Who is eligible for a Cash Balance Plan?
2025 Contribution Limits
Contribution limits typically go up each year, allowing you to save even more for retirement. Download this handy table to determine just how much you could be contributing to your own retirement—with and without applying a Cash Balance Plan to your retirement program.
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One of our 401(k) business specialists would love to talk to you about your company’s retirement plan needs.
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