Cash Balance plans for small business owners

For high-income business owners, a Cash Balance Plan can open up significantly higher annual funding than 401(k)s, SEPs, and IRAs allow on their own, often $100,000 to $400,000 more per year. The result: substantial tax savings and accelerated, creditor-protected wealth accumulation.

Request an Illustration Estimate Tax Deduction

Estimates only. Actual amounts depend on age, compensation, the employee census, plan design, and IRS limits for the plan year. Not tax or legal advice.

Most businesses stop at the 401(k) or SEP IRA

For high-income owners, that often leaves the largest piece of the retirement puzzle on the table.

The reason isn't always eligibility. It's awareness and access to a well designed Cash Balance Plan.

At CBC, we are here to help close that gap.

Example · A 52-year-old owner · 2026 Plan Year
$320,000
Total annual contribution
401(k) deferrals $32,500
Profit-sharing / employer contribution $47,500
Cash balance $240,000
Current-year tax savings $124,800

The first two layers are where many businesses assume the maximum has been reached. The cash balance layer is what changes the total. Savings assume a 40% combined federal and state tax rate and exclude the $8,000 catch-up, which most high earners must now make as Roth. Estimates only. Not tax or legal advice.

Max cash balance contribution by age

Annually, over and above a 401(k) and profit share. Age is the single largest driver: the shorter the runway to retirement, the more can be funded.

$0 $100K $200K $300K $400K $500K Age 35 to 39: $104,000 to $127,000 $104K–$127K Age 40 to 44: $133,000 to $162,000 $133K–$162K Age 45 to 49: $171,000 to $207,000 $171K–$207K Age 50 to 54: $218,000 to $265,000 $218K–$265K Age 55 to 70: $278,000 to $473,000 $278K–$473K AGE 35–39 AGE 40–44 AGE 45–49 AGE 50–54 AGE 55+

Swipe to see the full chart

Youngest age in band Oldest age in band
Annual limits nearly triple between age 35 and age 55.

Estimates only. Actual contribution limits depend on age, compensation, the employee census, plan design, and IRS limits for the plan year. Not tax or legal advice.

Determining fit and feasibility

A simple, guided process

Cash Balance Consultants is here to coordinate and facilitate the process, so the advisor, the CPA, and the owner can each stay focused on what they do best.

STEP 1

Initial review

A few key details about the business, employee demographics, and plan goals to determine if a cash balance is worth pursuing.

STEP 2

Custom illustration

Our actuaries model contribution ranges and design options for the specific business. Complimentary, and non-binding.

STEP 3

Strategy and implementation

We walk through the results together, answer questions, suggest changes and refine the design. If it's a fit, we'll manage the implementation process along with the advisor and CPA.

STEP 4

Ongoing administration and support

Annual valuations, compliance, filings, and coordination, so the plan stays on track.

What makes a good candidate?

Plan design and census data determine what's actually possible.

Strong signals

  • High, stable income with excess cash flow
  • An owner or partner group that is older, with higher compensation, than most of the staff
  • A 401(k), SEP IRA, or SIMPLE IRA in place, but contribution limits are not enough or already maxed out
  • A real appetite for reducing current taxable income
  • Comfort funding consistently for at least three to five years

Usually not a fit

  • Income that swings sharply year to year. Contributions are generally required once adopted
  • Excess cash flow needs to be deployed back into the business right now
  • A young owner relative to a large or older staff, which narrows the advantage considerably
  • An aversion to providing benefit dollars to staff
  • An expected sale or wind-down in the near term

We provide that analysis complimentary, through a custom actuarial illustration before any commitment. We'll tell you when it's not a fit as quickly as we'll tell you it is.

Next steps

We'll meet you where you are

Estimate Tax Deduction A quick, age-based estimate of maximum contributions. → Request an Illustration Verified figures from the employee census, prepared by our actuaries.* → Schedule a Meeting An intro call or education session with a specialist. → Read the Complete Guide The deep dive, for those who want every detail. →

*Actuarial illustrations are complimentary and non-binding.

About CBC

A team of professionals whose expertise and sole focus is Cash Balance plan design, consultation, and administration.

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