The New Year is the perfect time to reflect on the past and set goals for the future. But what if there was a way to turn back the clock and still save money in 2022?
Thanks to the SECURE Act (take 1), employers can establish a retroactive defined benefit, cash balance, or profit sharing plan for that year. The question then becomes: why would an employer want to set up a cash balance plan?
Our Retirement Plan Review provides more information, but we can also tell you a story. Once upon a time, a dentist in his early 40s wanted to save more money and reduce his taxes, but his employee demographic made it difficult. With their existing 401(k) plan and safe harbor match, he and his wife could only save $55,000. But with the help of NaviPath, they were able to add a cash balance plan that allowed them to save over $140,000 and retain 85.5% of the total benefits of the retirement plan!
Cash balance plans can provide significant savings for employers, but many don't know about this option. Our experienced retirement plan professionals can help employers evaluate if a cash balance plan could be a good fit – even for last year!