Supercharge Retirement Savings with a Cash Balance Plan

Add to Your Existing Plan

The plan can be added seamlessly to existing an 401(k) and/or profit-sharing plan, enhancing your retirement savings strategy. Additionally, we offer a thorough analysis of your current plans to identify potential improvements and explore opportunities for larger tax deductions, ensuring your retirement strategy is optimized for maximum benefits.

Charles W. Rawl & Associates partners with a leading actuarial firm and third-party administrator that specializes in cash balance plans. The firm administers and maintains the plan to ensure it is optimized for maximum tax benefits while staying fully compliant with IRS regulations.

Charles W. Rawl & Associates does not provide tax, legal, or accounting advice; we work with your existing advisors throughout the process.

Key Features of a Cash Balance Plan

• High Contribution Limits: You can contribute significantly more than a 401(k) or IRA, with limits increasing as you get older.
• Tax Mulligan: If your business tax return is extended, your business would have until September 15 of the following year to fund a cash balance plan to reduce the prior year’s taxes.
• Tax Advantages: Contributions are tax-deductible for businesses, and the growth inside the plan is tax-deferred, allowing your wealth to grow faster.
• Flexibility for Small Business Owners: Whether you’re self-employed or run a small business, you can tailor the plan to benefit both owners and key employees, helping you retain top talent while securing your financial future.
• Protection from creditors: Multi-participant Cash Balance Plans are IRS-qualified retirement plans and are protected from creditors by ERISA. Bankruptcy law provides other creditor protections.
• Optional life insurance benefits: Up to certain limits, life insurance premiums are paid with pre-tax dollars. In later years, strategies can be employed to buy the life insurance out of the plan to provide income and estate tax benefits.

Maximize Contributions and Direct Funding Toward Business Owners

Customizable Contributions to Prioritize Owners’ Retirement Savings Needs

One of the more attractive features of a Cash Balance Plan is the ability to structure contributions in a way that benefits owners significantly. Key employees may also be favored.

How This Works:

Custom Contribution Formulas: Cash Balance Plans allow for disproportionate contributions, meaning owners can allocate higher contribution percentages for themselves compared to rank-and-file employees.

This is particularly beneficial for high-income owners nearing retirement.

Control Over Required Contributions: Not all partners or owners must be covered. Additionally, contribution amounts can be adjusted each year.

Enhance Your Plan with Life Insurance

Build Wealth and Protect Your Legacy

Including life insurance as part of your Cash Balance Plan offers additional benefits that go beyond retirement savings. It’s a tax-efficient strategy that not only provides financial protection for your loved ones but also helps you maximize the overall value of your plan. If you already have a pension plan, we can help analyze if you could benefit by adding life insurance to your existing plan.

Why consider life insurance in Your Cash Balance Plan?

• Valuable Death Benefit: In the case of a premature death, the death benefit is paid to beneficiaries income tax-free.
• Tax-Efficient Premiums: Life insurance premiums are funded with pre-tax contributions, reducing your taxable income and giving you valuable coverage at a lower after-tax cost.
• Enhanced Estate Planning: In a future year, the policy can be purchased out of the plan by an irrevocable life insurance trust, providing a meaningful financial legacy while avoiding estate taxes.
• Business Continuity: For business owners, life insurance can provide the liquidity needed for succession planning, ensuring that your business continues smoothly in the event of an owner passing.
• Increased Contribution Limits: Adding life insurance to your Cash Balance Plan allows for higher overall contributions, enabling you to further accelerate your retirement savings and provide additional security for your family.