Tax deductions are increasingly hard to come by, especially “above the line” deductions that directly reduce ordinary income dollar for dollar. With many federal, state and local tax increases within the last few years, Cash Balance Plans make a bigger impact on savings than ever before.
Below is a recent webinar we hosted with Kravitz Inc. explaining the advantages of Cash Balance Plans as well as how to use the Cash Balance conversation to turn prospects into clients.
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This fund is different from many pension funds where payouts are somewhat dependent on the return of the invested funds. Therefore, employers will need to dip into the companies earnings in the event that the returns from the investments devoted to funding the employee's retirement result in a funding shortfall. The payouts made to retiring employees participating in defined-benefit plans are determined by more personalized factors, like length of employment.
A tax-qualified benefit plan, shares the same characteristics of a defined-benefit plan, but also provides the beneficiary of the plan with added tax incentives. These tax incentives are not realized under non-qualified plans.
A Cash Balance Plan is a type of retirement plan that belongs to the same general class of plans known as "Qualified Plans" A 401(k) is a qualified plan. These plans "qualify" for tax deferral and creditor protection under ERISA.
For more of an overview download our Cash Balance 101.
Click here to download our Ideal Candidates Card.
Cash Balance contributions reduce both taxable income and adjusted gross income (AGI), so high income earners may move into a lower tax bracket. All of the following taxes may be reduced or eliminated by contributing to a Cash Balance Plan:
Download "How to Reduce the Pain of Tax Hikes" to learn more about the Tax Advantages of Cash Balance Retirement Plans.
To learn more about the advantages of a Cash Balance Plan or for a custom illustration, complete the form below and a TRA representative will be in contact with you.