Defined Benefit Plans are one of the most useful of all retirement plans that can favor the older business owner with large income tax deductions while securing significant retirement and estate benefits. This is a brief outline of the potential benefits of these plans. Actual benefits must be calculated and certified by a qualified actuary. General Plan Design: These plans work best when the business owner(s) are older than the general employee population. A Defined Benefit Plan favors older employees because larger contributions are required in light of the shorter time to retirement. Contributions are mandatory each year based on the plan’s benefit formula, unless that formula is amended prior to the accrual of any benefits during the plan year (i.e. first few months of the plan year) or if the plan is terminated. These plans are best suited for those companies that have consistent profits and have a need for ongoing business tax deductions. Integration of a Defined Benefit Plan with a 401(k) Plan: We will strive to have the benefits of the non-key employees funded in the 401(k) plan, while the Defined Benefit plan will fund the benefits for the owners and older employees. Plan Contributions by the   Read more…