More and more people would like to own a pension when they retire, but fewer and fewer companies are offering them. Business owners can create their own defined benefit plans that can be turned into a high paying pension after five, seven, or ten years.
One type of defined-benefit plan is growing fast. Cash Balance Plans are gaining popularity among business owners and medical practitioners who are behind on retirement savings.
Kiplingers reports that many business owners are turning to these plans to turbocharge their retirement savings. Cash-balance plans have generous contribution limits that increase with age. People 60 and older can sock away well over $200,000 TO $300,000 annually in pretax contributions. In 401(k)s, total employer and employee contributions for those 50 and older are limited to only $57,500. Steve and Sinclair review the fundamentals.
In the Q & A Session, professional actuary and plan administrator Brad Lankford joins the A-Team to dig into Cash Balance, 401k, and Defined Benefit Plans.