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. 
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.

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.