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Cash Balance Plans

Reduce your personal taxes. Increase your personal savings.

A Cash Balance Plan is a great retirement savings plan for highly profitable small to midsize businesses; including high earning owner operators. While there are certain risks to consider, participants can expect benefits that other retirement strategies can’t offer—including significant tax reductions and accelerated savings. 

Learn how to reduce taxes and increase savings: Schedule a consultation today.

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What is a cash balance plan?

A Cash Balance Plan is an IRS-qualified Defined Benefit retirement plan that can help business owners realize tax deductions and savings rate up to 4x greater than a 401(k) plan alone. *Assumes annual 401(k) maximum contribution of $19,000; $6,000 catch up; $37,500 profit sharing (for 2019)

How does a 401(k) Cash balance plan work?

A Cash Balance Plan is used in combination with a 401(k) Profit Sharing Plan in order to maximize retirement savings and tax deductions for business owners. Unlike a 401(k) plan, all assets within the Cash Balance Plan come from the employer, assets are pooled and investments are employer-directed and employer-guaranteed.


why does a cash balance plan matter?

For many successful business owners, the contribution limits of a 401(k) alone may not be enough to achieve retirement savings goals. Adding a Cash Balance Plan can help.

Employees benefit too with a guaranteed company contribution to their retirement account.

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A Cash Balance plan may be a good fit for you if:


  • You are seeking to reduce your annual taxable income by $56,000+

  • You want to significantly increase the rate of your retirement savings

  • Your business produces a steady revenue

  • Your annual income is $280,000+

  • Your business has fewer than 15 employees per owner


To learn more about how cash balance plans can reduce your taxes substantially and increase your retirement savings talk to our Cash Balance Plan Specialists at 559-504-9705.

Why are cash balance plans so popular?

  • Taxes: Many business owners and partners feel they are paying too much in income tax. A cash balance plan allows them to put more into retirement than a traditional 401(k) plan, reducing their taxable income.

  • Combo: A Cash Balance Plan works best when combined with both a 401(k) and a Profit Sharing Plan—allowing for business owners and employees to save more toward retirement.

  • Qualified: This is an IRS-qualified Defined Benefit retirement plan.

  • Retirement Savings: Americans aren’t ready for retirement and the Boomer generation feels it the most as they approach retirement age. Cash Balance Plans allow older business owners a way to accelerate their personal retirement savings.



Cash Balance Plans can be offered in addition to other company-sponsored retirement plans. If you're seeking to add a Cash Balance Plan before this year's December 31 deadline, you'll need to get started by October 15—and it's easier than you think. Here's how it works with Kerr Payroll Solutions:

  • Contact us, and we'll send you a form (called a census template). The census template includes information like employee salaries, date of birth, date of hire, and ownership information. Send the form back to us after it's filled out, along with a copy of the Adoption Agreement for your existing 401(k) plan.

  • An actuary will prepare an illustration that depicts what adding a Cash Balance Plan to your company 401(k) can do for your specific business, including the specific costs and benefits. Once you have this information, you can decide whether you'd like to move ahead.

  • If you decide you'd like to start a Cash Balance Plan, we will work with you and an actuary to coordinate plan documents that integrate with your existing 401(k). Documents must be signed by December 31 in order to get the tax savings for this year. You won't have to put any money into the plan until you file your annual taxes next year.

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