Cash Balance Plans 101: The Retirement Tax Shelter Hiding in Plain Sight
A powerful way for high-income business owners to lower taxes and boost retirement savings.
If you’re a high-income business owner who’s already maxing out your 401(k), you might think you’ve reached the ceiling on your retirement savings and tax deductions. Think again.
A Cash Balance Plan is a specialized retirement plan that can allow you to contribute well into the six figures — all tax-deductible. For the right business owner, this can mean saving $100,000+ in taxes each year while rapidly building retirement wealth.
What is a Cash Balance Plan?
A Cash Balance Plan is a type of defined benefit retirement plan that feels like a 401(k) to the participant but works under different IRS rules. It offers:
Annual pay credits: A set contribution amount each year
Guaranteed interest credits: Typically a fixed rate or tied to Treasury yields
Tax-deferred growth until retirement
Why Business Owners Love Cash Balance Plans
Massive Tax Deductions — Often $150k–$300k annually
Accelerated Retirement Savings — Great for “late starters”
401(k) Integration — Stack benefits for even more savings
Custom Design — Favorable allocations for owners and partners
Is It Right for You?
CBPs are best for:
Profitable business owners age 40+
High, stable annual income
Desire for significant tax savings
Willingness to commit for 3–5 years
Bottom Line:
A Cash Balance Plan could be the missing piece in your tax and retirement strategy. But because it’s a complex tool, the best next step is a personalized analysis.
Schedule your CBP Tax Savings Analysis today to see if you qualify.
