When to Consider a Cash Balance Plan 2021

1. When to Consider a Cash Balance Plan If your business is seeking an opportunity for a greater tax deduction and a way to help key employees maximize benefits, especially over a short period of time, consider a cash balance plan. Cash Balance plans generally work best for professional groups of closely held family corporations with strong profit margins. Because of their unique plan design features, these plans enable key employees to save more than they can under the current defined contribution plan limits, while still enjoying the ERISA protections that come with a qualified retirement plan. An Ideal Solution For: • Business with strong profit margins and reliable earnings stream • Closely held family businesses or corporations with fewer than 25 employees • Employers seeking to offer a plan with contribution limits over and above current defined contribution plan limits • Businesses looking for a larger tax deduction than a 401(k) or other defined contribution plan can offer on its own • Employers looking for greater plan design and contribution flexibility to provide different benefits for different employees

2. 401(k) Profit Sharing and Cash Balance Plans Age 401(k) with Profit Sharing* Cash Balance Total Tax Savings** $139,400+ $348,500+ Above 65 $64,500 $284,000+ $335,500 $134,200 65 $64,500 $271,000 $329,500 $131,800 60 $64,500 $265,000 $269,500 $109,000 55 $64,500 $205,000 $222,500 $89,000 50 $64,500 $158,000 $181,000 $72,400 45 $58,000 $123,000 $153,000 $61,200 40 $58,000 $95,000 $132,000 $ 52,400 35 $58,000 $74,000 Up to $128,000 Up to $51,200 Under 35 $58,000 $70,000 *401(k): $19,500; $6,500 catch-up (50+); $38,500 Profit Sharing **Assuming 40% tax, varies by state. Taxes are deferred Follow Our Conversation Pentegra Retirement Services 2 Enterprise Drive, Suite 408 Shelton, CT 06484 800.872.3473 www.pentegra.com