Choosing the Right Structure

Owners can pair a safe harbor 401(k) with profit sharing or adopt a defined benefit/cash balance plan for higher deductions. Age, income variability, and workforce mix drive the optimal design.

Tax and Succession Planning

Use discretionary profit sharing/new comparability to target contributions within testing rules.

Consider cash balance for six‑figure deductible contributions when goals justify complexity.

Coordinate plan design with exit timing and entity compensation (W‑2 vs. K‑1).

Governance and Cost Control

Model three‑year scenarios; review fees and funding flexibility annually with your advisors.

Plan Sponsor Action Checklist

References

• IRS Cash Balance overview; DOL fact sheet on cash balance plans.