Prepare for retirement quickly with a Cash Balance Plan
Cash balance plans are a type of defined benefit plan in which the company makes contributions on behalf of all participants. What sets these plans apart is they offer much higher contribution limits than a 401(k), especially for older participants. Those participants can contribute more after age 55 and provide a guaranteed retirement benefit.
In this plan, a participant’s contributions also grow tax-deferred at a set interest rate, rather than based on investment performance. This can benefit those starting late or those that want to boost heading into retirement.
Is a Cash Balance Plan the right move?
Once you understand these tradeoffs, you can work within the rules to find the right approach for your company. What makes me excited about cash balance plans is the flexibility they offer. For example, you don’t have to save the max: You take it slow for the first couple of years with a smaller contribution. Then, once you understand how the plan works, you can bump up the savings. This approach can help people avoid surprises that might affect the company’s cash flow.
Intelliplan is helping hundreds of individuals maximize the retirement options. A cash balance plan can be a huge boost to those wanting to ensure they are ready for retirement. Call or schedule an assessment today.
