Discover A Powerful Retirement Wealth-Building Tool

Virtually every business owner today is looking for new ways of becoming more tax efficient. That said a retirement plan is not usually the first place a business owner looks in terms of tax solutions. However, cutting-edge, emerging strategies are quickly turning the employer-sponsored retirement plan into a powerful wealth-building tool. One of these strategies is known as the “cash balance plan,” which allows employers to make tax-deductible six-figure contributions each year. It is also worth noting that these contributions grow on a very beneficial tax-deferred basis.

Let’s say that Rachel owns a small business and has an adjusted gross income of $400,000.  With no cash balance retirement contribution she would pay $103,000 in federal taxes. If she had a cash balance plan, she would pay $51,000 in federal taxes, and have a tax savings of $52,000. That is certainly worth getting excited about.

A cash balance plan can be attached to an existing 401k plan, or set up on its own. Either way, like all retirement plans, a cash balance plan allows the employer to retain key employees by offering greater benefits. No other plans, however, offer the laser-focused tax-efficiency that this type of plan makes possible. Using this unique and advantageous strategy ensures a long-lasting legacy for almost any business owner today.

This informative article has been brought to you by a partnership and collaboration between Silver Rock Partners and Economic Group Pension Services. Economic Group Pension Services (EGPS) is comprised of a team of dedicated, experienced, and responsive professionals who work with brokers, advisors, and a variety of other financial intermediaries to deliver outstanding retirement solutions for plan sponsors. Our partners include retirement specialists, accountants, financial consultants, registered investment advisers, and financial intermediaries who value our depth, range of experience, and independence.