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Combination Plans

401(k) Plan combined with Defined Benefit Plan

Typically thought of as a big-company retirement plan, a 401(k) Plan - a type of Profit Sharing Plan - is also available to small-business owners.  Two examples of when to consider combining a Defined Benefit Plan with a 401(k) Plan:

  1. No Eligible Employees: If an owner is interested in making larger tax-deductible contributions than are available using a Defined Benefit Plan alone, then adding on a 401(k) Plan allows for additional owner contributions.  Potential additional 401(k) Plan contribution in 2023: $49,800
  2. With Eligible Employees:  If an owner has employees, resulting in a stand-alone Defined Benefit Plan being too expensive for providing benefits to staff, then adding a 401(k) Plan (or a Profit Sharing Plan) allows for maximum benefits to the owner and affordable contributions to staff.

             •  Combination Plan Illustration – With Eligible Employees
Which retirement plan is right for you or your client? 

That’s for an actuary to help determine.  Please contact me and I’ll help you assess the opportunities.