Highlights of a Defined Benefit Plan

  • Niche retirement plan for small business owners
  • Ability to increase contributions for supplemental retirement – provides for much higher tax-deductible contributions than a 401(k) profit sharing plan alone can provide (maximum amount depends on age/income)
  • Ability to increase overall deductions for the corporation – contributions to the plan are tax-deductible and investment earnings are tax-deferred
  • Supplement to 401(k) plan – defined benefits plan can be maintained along with and as a companion to a 401(k) profit sharing plan
  • Creditor protection – assets are ERISA creditor protected
  • Flexible design
  • Purchase a life insurance plan at a discount (paying with pre-tax dollars) and have the ability to purchase the insurance out of the plan at a future date and use cash as a supplemental retirement vehicle or keep death benefit for estate planning/wealth transfer, etc.